Print • Online • Network | Vol. 4 • No. 1 • 2011

A Resource Guide for Investors

Discover Why Investors Around the World Trust

The Leaders of the Memphis Market Understand the Needs of Long-Distance Landlords



of networking

and a lot




Robert Kiyosaki

Ken McElroy

Dolf de Roos

Mark Anthony Bates

Thomas Senatore



Realty411 Wealth
Real Estate
FOUNDER Linda Pliagas EDITORIAL STAFF Lori Peebles Anita Cooper Andre Sanchez Brianna Bertrand COPY EDITOR Anita Cooper Andre Sanchez PHOTOGRAPHERS Sam Green John DeCindis COLUMNISTS Sam Sadat Dave Lindahl Charles Salisbury PRODUCTION Emma Krull Augusto Meneses

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PAGE 3 • 2011

Chris & Ruth

Property Flipping Experts

Share their Secrets on how to rehab and flip properties for Big Profits in this great Foreclosure Market in the Southern California Area.

Upcoming Property Tour Event

Check our website for Calendar of Events in Southern California Only.

Receive Chris & Ruth’s “Property Analyzer” and guide to “How To Start Your Flipping Business”

562-304-7787 or log on to:

10 An interview with Sam Sadat, the director of Sam’s Real Estate Club. 8 and 22 Top Secrets from master investor and educator Dave Lindahl. 13 Guild Mortgage clarifies misconceptions about financing. 15 Invest with the Best, Invest with 19 Entrepreneur/Investor Kent Clothier takes the road less traveled and succeeds. 20 Black Belt Investors teaches us how to master the art of the flip. 24 True Wholesale Houses delivers steady returns for investors in a volatile industry. 27 Market Spotlight: Kevin and Alex are at the forefront of multiple top South Eastern markets. 29 Tyrone Jackson wants to diversify your real estate portfolio with stocks. 30 Christian and Ruth teach Southern Californians their property rehab secrets. 33 Richard Barrett asks: What is your real estate time? ������������������������������ ������������� ����������� ���� �� ���������� ����� ����� ������� ������������������������������ 34 In memory: Fred Tingley’s ������� ������ ������ ������� ���������������������������������� ������� �������� �������� ����� �������������������������������� last real estate column. ������ ������ ����� ������� ����������������������������� 35 Market Spotlight: Phoenix, Ariz. ��������������������������������� ��������������������������������� ������������������������������� ��� ����� ��� ���� ���� ��� 36 Top 20 excuses for failure. ������������������������������ ���� ������� ������������ 38 Gary & George’s Monopoly Secret �������������� ���������������� ������������� ����������������� 39 to 53 Meet the Hip Real ������������������� ���������������� ��� �� ���� ��� ���� �������� ��� ���� Estate Divas of Today: ����� ���� ������ ����������� ����� Powerful gals in the industry give ������������������ �������������������� ��� ���� ��� �� ������ ���������� their advice and tips. ���������� ������� ���������� 54 Maximize your legal protection �������� ���������������� ��������� �������������� ����� �������� 57 Inside the cashflow board games ��� �������� ��� ���� ������������������ ��������������� ���������������� �������������������� 58 Tom Wilson gives his insight on the market recovery.


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Questions? Need a Referral? 805.693.1497 or 310.499.9545

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Beyond Real Estate, A Bigger Vision of Helping


If Single Family Homes Are Such Great Investments, Why Do Most ‘Investors’ Still Go To Work Every Morning?


ouldn’t you love to discover how to make $9,700+ in passive income month after month… and how to reap huge positive cash flows from real estate – with less risk, less money down, and no tenant headaches? I’ll tell you what, if you want to collect an automatic monthly income of $9,700 or more -- without having to get up every morning and “go to work” – then you need to know that most real estate experts are giving you the wrong advice! See, they rave about buying and selling single family homes, but they don’t tell you about the risks and downsides. They

by Dave Lindahl
no income. That’s not financial freedom. 4) The government takes 33%-50% of your profits! When you hold houses for less than a year, your profits are taxed at the painfully high rate of “ordinary income”. Compared to my approach, you have far less cash to roll into the next property. The result: it could take you twice as long to attain financial independence.

When you’re flipping houses, you’ve got to keep working to earn your next “paycheck”.
don’t admit that single family homes are poor investments for passive income... for attaining real financial freedom. Now don’t get me wrong, if you can wait a few years for your upside, single family homes have a history of appreciating nicely. And if you’re happy making one-shot profits, flipping houses can be an exciting business. Over the past eight years, I myself have bought, rehabbed, and/or sold 422 houses. If you can pull it off (despite the risks), you can make a big profit in four to six months. It can be a good business model. But it’s not financial freedom. When you’re flipping houses, you’ve got to keep working to earn your next “paycheck”. You’ve got to keep marketing, buying, renovating, and selling. This is the life of a “house flipper”; 1) You’re at the mercy of

tors. Most bargain homes are in disrepair. You’ve got to renovate them, but most contractors are unreliable. You’ve got to oversee everything they do, or risk paying for their mistakes. And the good ones are always booked up for months in advance. 2) You lose money for four to six months. That’s how long it takes to fix up a house and resell it. When your contractors drag their feet, you’re left helpless and stressed out. Every day your house sits vacant, your bank account is further depleted by loan payments, taxes, insurance, and utilities. 3) Your job never ends. When you finally sell, you’ve got to start all over again, marketing, negotiating, and overseeing your contractors. If you take time off, or can’t work for awhile, you have
PAGE 8 • 2011

If you’ve read the best-selling book Rich Dad Poor Dad, you understand that income-producing assets are the key to financial freedom. You also know that Robert Kiyosaki (the book’s author) built his personal fortune through buying and holding real estate. Unfortunately, Kiyosaki doesn’t go into detail about how he selected, managed, or sold his properties. That’s why I’m writing, “The Real Secret…Apartment Buildings And How To Manage 642 Units With One Phone Call Each Month!” Today, I own 33 multi-family apartment complexes, with 7,322 units in all. Yet, I never deal with a single tenant, their complaints, any repairs, or vacancies. My carefully chosen property managers handle 100% of the tenant management. I have one phone call per month

with each of them; that’s it. Last year, I sold four of my properties. After paying off my loan balances, I received four separate checks for over $200,000 apiece. And I used a legal tax loophole to pay zero taxes on three of them. I can show you how to do the same. Why haven’t you heard more about apartment buildings? Because apartment investors don’t want the general public to know about their successes. Apartment investors are already w e a l t h y. J u s t look at the late Red Auerbach of the Boston Celtics. He made his real money buying apartment buildings, then b r a n c h i n g o ff into hotels. Likewise, Arnold Schwarzenegger made his first fortune buying apartment houses in Colorado. Here Are The Biggest Advantages That I See In Apartment Investing: 1) Apartment buildings are “cash cows”, especially when compared to single family homes. For example there is a six unit building I own in Brockton, MA, that nets me $1,877 per month (after all expenses)! Think about it, more units in each property brings you more income. 2) You start profiting instantly. Rather than being drained for 4-6 months, carrying the costs of a vacant house, you enjoy positive cash flows from day one. And you can live off that income, so you don’t have to go to a job everyday! 3) Build huge equity and live off the cash flow. If you live off the income from bonds, CDs, or mutual funds,

tion devalues your principal. But when your buildings appreciate and your tenants pay off your loans, you create huge equities, and eventually own them free and clear. 4) Hands off management. Because apartment houses offer so much income, property managers charge an average of

ship program. It’s aim is to take you by the hand and share with you the proven tools you need to be successful in investing. But with everything in life there is of course a catch. And the catch is that I can’t work with everyone. There isn’t enough time in the day. But my strategists and I can work with a select group of people.

just 4% of the gross rents (versus 10% for single family homes). 5) Cut your taxes in half. Instead of paying 33-50% in taxes, you’ll pay the low capital gains rate (now 15%). Seventeen years ago, I was fortunate to have a mentor that showed me the truth about apartment investing and he was there to take my hand and get me started!. Now whether you have ever invested in real estate before or if this is just something that you have always thought about doing, I would love to take your hand and share with you the exact strategies and processes that have made me a multi-millionaire. Fortunately for you, I have created a very successful but limited mentorPAGE 9 • 2011

There is no better time than right now to find out if you qualify for the mentoring program. To take my brief questionnaire to determine if apartment investing is right for you and to see if you qualify to become one of the lucky few people I will mentor, visit, do it now. My mentor made me promise that when I became successful, I would pass on my knowledge. I hope you are one of the few people I take under my wing to share these powerful techniques. Receive Dave Lindahl’s free report, call 800-559-8590 or visit: To read more about Dave and hear a students success story visit:

Mr. Motivator
The founder of Sam’s Real Estate Club in Beverly Hills discusses his start in real estate and explains why his message of abundance is so urgently needed into today’s volatile market.
article by Linda Pliagas photography by John DeCindis


he Westside of Los Angeles is hustling with investor activity. Within a five-mile radius there are no less than seven real estate clubs, serving thousands of investors. But one organization goes way beyond simply being a club that talks about real estate. It is a self-help investor organization, which

encourages individuals to take action for a life of fulfillment. With over 2,000 members throughout Southern California, Sadat attracts visitors from up to two hours away. His clubs also hosts some of the nation’s most sought-after speakers, such as Than Merrill, Scott Meyers, Richard Roop and Reggie Brooks. Sam’s Real Estate Club founder is Sam Sadat, a spirited U.S. immigrant of Persian descent who has lived in numerous parts of
PAGE 10 • 2011

the nation and eventually made his home base in Santa Monica, Calif. Sam’s passion, other than putting together real estate transactions, is the study of metaphysics and spirituality. It is this reapand-ye-shall-sow philosophy, which also permeates at his club, that has attracted many loyal monthly followers to converge at the Beverly Hills Country Club. “I try to shift people’s mindset from scarcity and lack to that of abundance,” reveals the daily mediator. “Most people thinks that motivation comes from the outside, but that is an illusion. The fact is, motivation comes from within.” Sadat began his quest for real estate knowledge shortly upon graduating from University of Texas, Austin, with a degree in mechanical engineering. He recalls: “At the time, I was working for corporate America. I took a hard look at my bosses, who had already been working there for 20 to 30 years, and I knew there had to be a better way.” In his quest for real estate, he first became attracted to real estate finance because he realized that “knowing the numbers,” was vital. Part of Sadat’s real estate education led him to start attending real estate clubs. He fondly recalls attending investment gatherings in different parts of the country,

including Colorado. By the time Sadat began to live in Los Angeles, he was already experiencing phenomenal success in real estate finance, including traditional mortgage and hard money lending. He was also buying, rehabbing and flipping properties as a sole investor and also with partners.

“Fear.” He adds: “That is really the fundamental reason why people don’t act, it’s because of fear. The fear of the unkown and fear of failure are really two of the most incredible fears that we have.” While Sadat is thankful for the success he has found in real estate, it hasn’t al-

creative transaction, later he found out the seller was attempting to sell the same properties again! “It was a learning experience for me and for others of what not to do, not having gone though a traditional escrow caused me a lot of aggravation and money because

It is then that he says he felt a longing ways been smooth sailing. “I lost millions I ended up having to take legal action.” to create his own space. “I wanted to have because of the Northridge earthquake in During emotionally and finana forum for me. I wanted to make sure I 1994,” he confides. (Most Californians do cially devastating times, Sadat turns incould inspire people.” ward for strength and relies He carved out a space in on words of wisdom from Van Nuys and began to the individuals he admires host monthly meetings in most: Carl Yung, Wayne Join Sam Sadat the 4th Wednesday of every May 2003. The number Dyer, Ralph Waldo Emof guests soon swelled erson and Rumi, a Persian month at the beautiful Beverly Hills Country into hundreds of people. poet. Club. Meetings start at 7:30 p.m. and usually Sadat prides himself in Successful attributes in last about 2 1/2 hours. Reserve your seat online having a club where edulife, like in real estate, need cation, not promotion, is to be developed. “I’ve heard for $10 per person, which includes valet parking. the focus. my shares of ‘no’. I’ve had Please register for the club meeting online at: His goal is to transform to work on myself. It’s a life each one of his members mission.” from being a potential inFor Sadat that calling vestor into an active one. is not merely a personal, “My main focus has become teaching not carry earthquake coverage due to its internal goal, as much as it is an evolving and mentoring my students because often lack of affordability.) Another tough lesson and fully dimensional manifestation. It is you have to hold their hand and literally he learned was that no matter what type of an avocation that he says he hopes will elpush them to act upon their knowledge.” transaction a real estate investor does, they evate all those he reaches. When asked why so many people sit on need to hire an independent escrow comthe sidelines when it comes to taking ad- pany to make sure the contract is followed Be sure to visit Sam’s Real Estate Club onvantage of the greatest buyer’s market of accordingly. Sadat learned the importance line for a schedule of speakers: all-time, he replies with one simple word: of this when he purchased three homes in a

The Scoop on Sam’s Real Estate Club

“Most people think that motivation comes from the outside, but that is an illusion. The fact is, motivation comes from within.”
PAGE 10 • 2011

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Invest with the Best
The Market Leader is
by Charles Salisbury, MBA

Photograph from left to right: Chris Clothier, Brett Clothier, Kent Clothier Jr. and Kent Clothier Sr.


“If you commit to getting better every day, your customers will demand you get bigger.”
— S. Truett Cathy, founder of Chick-Fil-A. you plan to invest out of state, you need to find the right company to partner with — someone that has experience, that has knowledge not only of the industry but of the market, and someone that is a true turnkey provider.” While there are many companies who call themselves “turn-key” (so much so that he feels it has become an overused phrase), Chris believes that investors searching for a turn-key company to partner with should look for organizations who “own and operate every step of the equation.” This way, investors are not getting a company that says: “buy from me and I will give you contacts for renovation, or contacts for property management or contacts for insurance.” Chris says this is a recipe for disaster and it is a lot of hands-on work for
PAGE 15 • 2011

his sage advice, as well as nuggets of gold from other customer focused gurus, has been adopted into’s own company goals and aspirations; namely to be the absolute best turnkey investment company possible. Many investors try their hand at out-ofstate investing only to become frustrated with the less than stellar returns they experience when dealing with companies who claim to be “turn-key” investment companies that simply provide contacts, leaving customer service out of the equation. Chris Clothier of offers his advice for individuals who are interested in finding a true turn-key company for their out of state investments. “If

an out of state investor. Chris continues, “You are looking for someone with all the business acumen to put together all the steps that make sense.” The Clothier family established and her sister companies, Memphis Invest Renovation Services and Premier Property Management on the firm belief that out of state investors need access to proven, qualified professionals who understand their needs. MemphisInvest. com partners with investors by handling all of the details — from purchasing investment properties to ongoing maintenance and property management, helping to alleviate the stress that often accompanies buying properties far from home. Memphis Invest makes investing simple
Continued on pg. 17

for out-of-state investors. “You make one phone call,” states Chris, “and you’ve got every department any answer — access to every single person in this company, so [the process is] very streamlined.” Chris believes that successful investors possess some common traits — “they have to be inquisitive, they have to have curiosity. They shouldn’t ever take everything at face value. They should be inquisitive as to who they’re dealing with, and what markets that they’re looking to buy in. They should be willing and able to do some homework, look around, and ask the right questions. They should also have a long term mentality. This is not get rich quick by any means. The other thing that investors need to be successful in long-term buy and hold, is they need access to capital. No money down is not an avenue to success. You have to have access to some capital and be able to build a long-term portfolio whether you use straight cash or some kind of leverage.”, possessing a strong customer service focus and attitude, makes sure that an investor knows, from the start, if this opportunity is right for them. “I don’t want to waste an investor’s time or raise their hopes,” says Chris. “We are very up front and very frank when we have our discussions. We need to know the financial strength and ability of an investor so we can help make sure they’re successful.” Investors who partner with Memphis Invest will realize that “they have found a great opportunity in Memphis, they’ve identified one of the premier turn-key investment companies in Memphis, and they’ve communicated real clearly exactly what they want — from there they just let us do it, and then they buy the opportunities that we bring to them,” says Chris. He continues: “This is about buying cash flow investment property, if an investor tells us that they need to earn a certain amount of cash flow to pay their bills each month, we are very adamant that they need to look at other financial opportunities, other financial advice before buying real estate.” For the Clothiers, “There is no sale worth making that’s gonna hurt somebody, just for us to make a little bit of money,” states Chris. Why would an investor choose to partner
Continued on next page

Top: An out of state real estate investor celebrates purchasing two investment properties.

Top photo: Customer Service Team at Carol Henderson, Cyndy McCrary, Ashley Claunch; Bottom photo: Brett Clothier gets ready to speak to a room full of real estate investors at a buyer tour in Memphis, Tennessee.

Continued on pg. 31
PAGE 17 • 2011

with “As a company, we hold in very high regard the customer service that we provide,” says Chris, “we have three dedicated employees that provide customer service, including calling every one of our clients every month on behalf of our property management company and on behalf of the Clothiers, as the owners — and they ask the simple question: “What can we do for you?” Chris shares the reason for Memphis’s amazing growth. “About a year ago we started to take time every single week to stop everything, and come together and study how to get better at customer service, and at business as a whole.” The investment in customer service has paid off — in spades. In the first half of 2011, MemphisInvest. com became the largest private home seller in west Tennessee. The only companies who sell more homes than Memphis Invest are Fannie Mae and the Department of Housing and Urban Development. “ To d a t e , ” s a i d Chris, “we closed 163 transactions so far in 2011. Last year at this time, we had closed 79 transactions.” The integrity and distinction that brings to the turn-key investment industry is seen clearly by their actions doesn’t recommend properties that they wouldn’t buy themselves. In fact, their investors buy and own in the same neighborhoods that the Clothier family buys and owns in. Traveling to other cities, such as New York, Chicago, Boston, and all major California cities, takes time to visit their clients face to face. Why? “We’re willing to do whatever it takes to provide the best service possible and to show our clients that we’re there for them,” Chris replies. Rental Opportunity

Here is one sample property, this home is already sold, but other great rentals are still available. Be sure to add one to your portfolio. 3 Bed/2 Bath with 2 car garage Built in 2000 - Sq Footage - 1,601 Purchased for $69,000 OR $37.41 PER SQUARE FOOT $10,000 in full renovation work completed Tax assessed value in 2010 of $104,000 Gross yearly Rents Between: $9,900 and $10,740 Assuming 30% of rents for yearly expenses and the property has a cash on cash ROI of approximately 10% invites readers to join them at their events in the following cities: •September 8th-11th - New Orleans •October 1st - Boston •October 18th - Phoenix •October 29th - NY •November 12th - Vancouver •December 1st - San Jose •December 3rd - San Diego

PAGE 18 • 2011

ne conversation with Kent Clothier will open your eyes to a fatal flaw found in many real estate programs: Most of the gurus who pitch the products don’t actually utilize them. Well, here is some inside scoop: Kent Clothier (and his entire family and team) actually use the systems Kent promotes. As owner of 1-800-SELLNow, the systems Find Cash Buyers Now and Find Private Lenders Now, and as co-own-


Follow the Road Less Traveled
wants to do, has been the key to Kent’s success. “If you’re willing to do what others are not, then you will find that success will usually follow,” said Kent. Kent believes that his success, and that of his family, the Clothiers, “...lies in the fact that we’re willing to do something that others aren’t.

Kent Clothier Chooses to

“If you’re willing to do what others are not, then you will find that success will usually follow...”
er of, Kent Clothier uses the same knowledge that he shares with his clients, many whom have already seen great success in their own right. “The industry is filled with people who want to tell you how to do it,” notes Kent, “but they’re not doing it themselves. There’s a lot of people who want you to buy this program, or buy that program, [but] the actuality is, very few of them are doing deals. Not only do we educate people, but we’re also buying and selling three to four hundred houses per year.” Kent got his start in real estate after a successful career in the wholesaling business with a multi-billion dollar company in the grocery industry. After leaving the grocery business, he was, like many individuals, “sucked into” the real estate industry by those infamous late nite “infomercials”, however unlike so many who try their hand at real estate investing and fail, he put everything into his businesses and has grown three successful ventures in addition to working with his family’s business, MemphisInvest, a truly wholesale investment company. A focus on creating a relationship with their clients and meeting their needs, as well as always doing what’s necessary, even the “dirty work” that nobody else

We are always willing to send someone down to the county clerk’s office to sift through property records to find cash buyers, people that are in our back yard, that we get to know, and by doing that we’ve built a very successful business, not a hobby.” When Kent and his family shared the methods they utilized in growing their business with others in the real estate investment industry, they were surprised at the reactions they encountered. Individuals were amazed that the Clothier’s could find cash buyers, and build a brand for their investment business. Kent’s businesses were “born out of our own investing interest,” said Kent. “We realized that what we were doing was so unique, that we needed to share it with other people.” Investors who purchase their systems are provided with access to a wealth of information on real estate investing, including webinars, access to online cash buyers, continuous customer support and access to private lenders; virtually everything a serious individual needs to grow their investment business. More than just great customer service and access to fantastic products, investors
PAGE 19 • 2011

Kent Clothier

learn how to “run their business like a business.” “In our real estate education classes, we only spend 20 percent of our time teaching people on real estate, and we spend probably 80 percent of our time educating them on how to be an entrepreneur, or how to actually get in the game the right way,” said Kent. Rather than wait for the elusive (read “non existent”) “perfect” time to invest, Kent advises his clients to realize that “there will never be a better time, [your] inaction is costing [you] the opportunity of a lifetime!” “There’s never going to be another opportunity like this,” said Kent, “and yes, it’s supposed to be scary, it’s supposed to be a little unnerving, but it’s also what makes it exhilarating, it also makes it very exciting, it also makes it so rewarding when you finally get there, when you finally achieve the level of success you desire. ”

Mastering the Art of the Flip
Mastering the art of wealth creation takes time, it takes dedication, and most importantly, it takes direction - guidance from a wise investor who has himself mastered his own destiny through smart investment strategies. Sensei Gilliland, Founder and President of Black Belt Investors, has trained hundreds of investors to grow their wealth through his “action oriented and results focused” training programs. Utilizing discipline gained through years of martial arts training, Sensei has created a program designed for all levels of investors who need guidance and direction and who desire to create a real estate business that is cash flowing tens of thousands of dollars every month. Every experienced, or “black belt” investor, was once a “white belt” (beginner). He did not attain to his advanced position overnight; his knowledge increased as he put a transaction - you’re flipping real estate without the risk. Black Belt Investors is unlike many other real estate consulting, education and investment firms. “I truly believe that if you want to become a real estate entrepreneur and create your real estate cash machine,” shared Sensei, “you need proper training by an experienced instructor that practices what he teaches. You also need the instructor to take you from classroom instruction to applying the techniques in the trenches to help you develop your newly acquired skills and put you on the fast track
by Anita Cooper

Disciplined Investing

get passed that obstacle, whether you have to go around it, over it, through it or under it. If you can learn that from your coach, you will find yourself in a profitable position. I know with a few of my realty-based techniques, you will be able to pass any obstacle and get paid.” “One thing about Black Belt Investors,” shared Sensei, “is that one of our primary goals is keeping our investors engaged all the time. We’re not a fly by night company that trains students for 3 days and leaves them to do the work on their own. We’re a company that reaches out to help the student to get to the next level. We accomplish this through my coaching program which is directly with me and not through a call-in center that answers questions from a script. We also keep investors engaged through multiple free webinars, workshops, on-site mentoring and my free monthly real estate club meetings in Southern California, which keeps me accountable as I must show my face there every single month. If I was over promising and under delivering, then I would be exposed at that club meeting. Our investors keep coming back because they’re engaged, and when they’re engaged they be-

Deals are not going to fall in your lap, deals are created.
his training into practice. He also did not train on his own, rather he had a teacher that led the way. It’s vital that you find a successful mentor, someone who is interested in helping you achieve your business goals. If you’re looking for immediate cash, wholesaling is the best place to begin. Black Belt Investors will train and coach you on how to control properties and create immediate cash without the use of cash, without the use of credit, and without the use of loans. Basically, you become the middle man of

to getting paid. There’s a lot of real estate trainers and gurus out there that just promote fluff and stuff. They glamorize real estate to be extremely easy and profitable all the time, and yes, real estate can be extremely profitable, but the reality is, you’re going to have to do some work. Deals are not going to fall in your lap, deals are created. Just know that you will have some deals that are extremely easy that will put cash in your pocket quickly and with others you’re going to run into obstacles - it’s up to you as an investor to learn how to
PAGE 20 • 2011

come more successful. The only way not to be successful after one of my trainings is if you were to unplug yourself.” You will learn by doing. “If I were to train you to wholesale properties, we would develop a battle plan, grab your hand to lead you onto the field, and start doing the business. There is nothing better than hands-on training,” shared Sensei. “Think about it, if you were to learn how to kickbox, and I had a kickboxer that
Continued on pg. 56

A Way to Effortlessly Flip or Rent Cash Generating Properties in the Hottest Markets Across the Nation
We call it Remote Rehabs! Almost everything has been done for you, we have:
• • • • • • Strategically Targeted Markets to Buy cheap, Fix Easily and Sell Quickly Generated a Revolving Inventory of Deeply Discounted Properties starting at $20K Taken Away the Headaches of Deal Searching, Pencil Pushing, Rehabbing and Sales A Success Manager to Keep you Abreast and Coach You Throughout Your Deal Basically Put Time Back on Your Side to Rehab Houses without Lifting a Hammer “Gain Complete Control Over Your Life and Spend Less Time on Doing Things You Hate Doing By Using Remote Rehabs, a 100% Hands-Off Fix and Flip System.”

“Wow! Just wow! I don’t even know where to start with all the things that Remote Rehabs has done for me. Know that list of benefits that Black Belt Investors offers? Well they are all completely, one hundred and fifty percent true! All I know is that Remote Rehabs is the simplest and most profitable program I have ever experienced.” - Pek Lee Choo - Chicago, IL

“Exceeded Expectations”

“Simply Amazing”

“Here is what I did: I enrolled in Sensei’s program Remote Rehabs, he found me a deal and his team did all the work A-Z. Soon after the rehab and listing the property, I was amazed to receive offers on my investment! At first I put it off to blind luck, but within 45 days I receive a check for over $17,000 in net profits and I’ve been smiling since.” - Lynn McCloskey - Concord, CA

27 Days! Sold in

Cash Flow Equity &

51 Days! Sold in

Indianapolis, IN Purchase Price: $43,000 Repairs & Misc.: $32,000 List Price: $110,000 Sold Price: $110,000 Net Profit: $25,100 Cash-on-Cash Return: 33%

Phoenix, AZ Purchase Price: Repairs & Misc.: Fair Market Value: Equity Position: Cash Flow: Capitalization Rate:

$45,300 $4,200 $71,000 $21,500 $725 mo / 8,700 yr. 18%

Indianapolis, IN Purchase Price: $36,500 Repairs & Misc.: $22,700 List Price: $99,900 Sold Price: $95,000 Net Profit: $27,250 Cash-on-Cash Return: 38%

Black Belt Investors’ Remote Rehabs program is a truly unique and phenomenal way to build cash quickly. Believe that Remote Rehabs is without rival in any shape and form. Black Belt Investors stake their reputation on the fact. By getting involved today, you will be receiving a profitable and automated hands-off rehab business with its time tested methods, as well as Black Belt Investors’ 15 years of experience. Trust me... This is one chance you cannot afford to pass up; Take Action Now!

Office: 951-280-1900

Dave’s RE Tips

Real Estate

Fro m

th ub eP
Vol. 1 • No. 3 • 2011

lish ers of y4 alt Re 11

How could a real estate “investor” flip houses for eight years, only to wind up with no assets, no cash flow, and no income? by Dave Lindahl

Serving the Needs of Accredited Investors - INSIDE: Information to Grow and Maintain Your Wealth
Real Estate Hobby Investments 8 TurnaaProfitable Business 10 Be a Private Lender, 18 Zero DownSecret Recipe Learn to make BANK! into Learn Our

started working in real estate with my friend, Walter. We both started out rehabbing houses, but there were two big differences between us. First, I was a lot younger; I was 32, Walter was 58. Second, I grew my net worth and created a hands-free passive income. Walter, by contrast, got hooked on buying and selling. Why? He was afraid of tenants, so he rarely rented houses. When he did, it was always on a “rent to own” basis. (He offered the tenant a lease option). After all, single family homes don’t generate much positive cash flow. Walter didn’t mind giving up his


ture appreciation. After all, he always got $5,000 plus upfront in “option consideration” and he always sold his houses and made a profit. Over a three year period, he grossed an average of $109,00 per year. Sounds pretty good, doesn’t it? Unfortunately, the IRS calls him a “dealer”. That’s because he rarely holds a house for more than a year. So his profits are taxed at the painfully high rate of “ordinary income”. For example, he sold a house for a $29,000 profit, that’ll cost him about $10,000 in taxes. After overhead costs and taxes, Walter’s “take home pay” is only about $60,000 per year. And every dime pays for his living
PAGE 22 • 2011

expenses. The result: at the age of 65, his net worth is only about $33,000. And that’s not the worst part... If he stops buying and selling, he’ll have no income to live on! That’s because he has no income-producing assets. No positive cash flow. No annuity. And no equity. Now he looks back at all of those years and realizes he made a big mistake. Most of the homes he bought in the mid90’s have doubled in value, but he sold them all before they had a chance to appreciate. He gave away hundreds of thousands of dollars in appreciation. (And the IRS took a third of his profits). He never bought
Continued on pg. 62

TrueWholesaleHouses, LLC
“Equity Day 1, True Cash Flow, Peace of Mind”
We are proud to offer a proven cash flow investment with substantial instant equity. The investor receives the best of both worlds a true turnkey investment backed and managed by a team of life long real estate professionals. The Genesis of True Wholesale Houses, LLC is taken from a deep understanding of cash flow real estate investing properties and what it takes for the passive investor to succeed. The investor that chooses to invest with True Wholesale Houses, LLC will enjoy a predictable monthly cash flow and instant equity.
True Wholesale Houses, LLC takes the work and worry out of owning a rental property, while maintaining a proven cash flow to the investor. No more worrying about: 1. Collecting Rents. 2. Maintenance Emergencies. 3. Finding a Tenant. 4. No more worrying about managing property and managing your managers. 5. Property Taxes. 6. Finding the right home in the right neighborhood. 7. Insurance. True Wholesale Houses, LLC is your Equity Partner for the life-time of the transaction. Our partners on the ground have a stake in the home, the tenants, and preventing maintenance problems by doing a quality re-habilitation on the property before we place a tenant. True Wholesale Houses, LLC pays monthly cash on cash 9% return for the term of the note. If the home has a vacancy, we still pay you every month. As your partner, True Wholesale Houses, LLC will manage the property and sell it when the market recovers. If you wish to keep the cash flow and the 9%, you as the investor can dictate an extension on the note, holding the home in the caring hands of True Wholesale Houses, LLC. True Wholesale Houses, LLC is here to work with you to give you the best value for your money. We are your true wholesale partners so we can all prosper together.

True Wholesale Houses, LLC brings investors Wholesale to Wholesale deals as opposed to Wholesale to Retail


Atlanta, GA - $19,500 Equity DAY 1 Net Investor Cash Flow $340/Mo • Note Price $51,000

Jackson, MS - $17,500 Equity DAY 1 Net Investor Cash Flow $262/Mo • Note Price $35,000

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Atlanta, GA - $20,000 Equity DAY 1 Net Investor Cash Flow $309/Mo • Note Price $53,000

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True Wholesale Houses


ruly unique, truly amazing, truly one of a kind. True Wholesale Houses is different from every other investment company you’ve come across. Jay Hinrichs, managing owner of True Wholesale Houses is uniquely qualified to provide investors with top notch investment opportunities that promise consistent returns. Hinrichs is both a licensed mortgage banker in the state of Oregon, and a licensed real estate broker in California, Oregon and Mississippi. Hinrichs shared his reasoning behind True Wholesale Houses’ creation; “As a lender, back in 2008 and 2009, like every other lender at the time, we had foreclosure problems, I looked at the model and said, ‘There’s gotta be a better way to protect the investors than just letting them go off on their own.’” Concerned about this trend, Hinrichs devised the current model that True Wholesale Houses follows: They provide professional investment and property management experience that guarantees both the company and the investor yield substantial profits from their collaboration. “We’ve combined my years of lending knowledge and my years of buying and owning rental properties, and combined that knowledge into a hybrid model that gives the conservative investor, who’s looking for the utmost in protection and equity preservation, another avenue.” Hinrichs shares one key difference between his company and most other investment companies: “At the end of the day, none of these investment companies have an ownership interest in the property going forward, they’ve taken their profit

Offers Investors Security & Returns
Rock-Bottom Prices, Secure Returns & Built-In Exit Strategy

by Anita Cooper

Step 1 True Wholesale Houses, LLC acquires a foreclosed or REO property Step 2 Partner Company, Portland Funding LLC makes a loan at True Wholesale Cost Creating Instant Equity Step 3 True Wholesale Houses does a complete Rehabilitation of the property. Creating a problem and maintenance free property

Step 4 True Wholesale Houses tenants the property creating instant cashflow

Step 5 The investor buys the note from Portland Funding, gaining First Deed of Trust on the property, and a 50% equity position. Step 6 Monthly interest checks are sent to the investor Step 7 3 - 5 years later, TWH sells the property and investor gets 50% of the equity built, on top of the monthly returns from the cash flow generated by the tenants

up front. Our profit is deferred until the property sells. And like the triple net lease, we offer the same thing – investors get their payment monthly, regardless of whether it’s rented or not. With this program investors never have a cash call and they don’t have to worry about any of the maintenance. True Wholesale Houses deals with all the management headaches associated of owning and managing an asset. Unlike other investment companies, Hinrichs says that at True Wholesale Houses, both the property manager and the rehabber are owners of the property. “Our guys on the ground are vested in the properties. They have an ownership interest, and they too are working for the equity bonus when we sell these properties.” “Our ownership interest in the properties, assures investors that the assets are being managed to their highest potential for profit,” Hinrichs maintains. His forecast of the market is explained: “We believe we’re in the middle of a ten year cycle, and that in 3 to 5 years we’re going to be coming out of that cycle and once we see a chance to sell our properties at a substantially higher amount than what the note values are, that’s when we’ll start to roll out of the properties, because that is where our big profit is lying.” There is steep learning curve for individuals who are exploring investing in real estate. According to Hinrichs, what True Wholesale Houses does is “mitigate the learning curve, give a real return based on years of experience owning and renting rental properties, and giving the utmost consideration to principal preservation. We’re not going to lose money. You’re

PAGE 24 • 2011

ing with people who do this for a living. We stay in these transactions for the long haul and for the life of the transaction.” “I have put this model together so that everyone is a stake holder and have skin in the game. As long as we buy in the area we want to be in, rehab to our standards, not just to

the property is maintained in a peak performance standard throughout the life of the transaction.” According to Hinrichs, when one invests with their model, they can expect a nine percent cash on cash return with no downside, for the life of the investment. Then, when it is sold,

front, and the investor is banking on property values going up. “If the investor comes in with us, they already got equity because we’re putting them into the asset for literally 20, 30, 40 percent less than anybody else is going to sell it to them for,” said Jay. In addition to Hinrichs’ ex-

tensive experience in mortgage banking and real estate, he shares advantages that his company has over its competitors. His partner, Mike Hanks, is a successful home builder in Oregon. He has built over 500 homes. Hanks also has an IT background and has set up property administration systems for

rental standards, treat our tenants like gold, like they are, the rest falls into place. Our cash flow is great, and our investors get taken care of.” The reward is a real estate investment with a steady, unwavering return, which may sound like an oxymoron. When asked how this is possible, Hinrichs replies: “We assure investors of a consistent monthly cash flow, regardless of whether the property is rented or not. We achieve this by using a conservative vacancy and maintenance reserve allocation that assure that

(they believe that timeframe to be within three to five years), there’ll be another 30 to 50 percent equity payday for the investor. Compared to houses offered by other investment companies, Hinrichs says these properties are truly “wholesale.” For example, in Jackson Mississippi, they were able to offer a home to an investor at approximately $30,000 less than a similar home offered by another investment company. In other business models, the retailer takes the equity up

Guardian Management, which had 11,000 units, so they have the tools to manage hundreds and hundreds of houses. “Our partners on the ground are people that we’ve known for years. They are highly experienced and very excited to be part of the team and have an ownership interest in the house, other than just managing the house for somebody else and not owning any of it.”
Please note: Investors will be provided, upon request, with banking references to validate True Wholesale Houses’ financials.

We Help You Get The Most Out Of Your Investment!
Carolina Liquidators helps investors like yourself find the best deals on properties in your area. Along with providing a resource to help you find investment property we also pride ourselves in having the ability to educate you on making sound investments and helping your make the most out of your business.
Carolina Liquidator and it’s affiliates are primarily Real Estate Wholesalers. With over 40 years combined experience in the Real Estate and Mortgage industry we are able to help you achive your Real Estate Goals that may have not otherwise have been possible. We have a full staff of people hunting, researching, marketing, inspecting and negotiating these deals. Companies like us can supply you with deal after deal; why not let us do the work for you? We have the time and resources to find these deals that most likely will not be available to you. 1825 Remount Rd. Charlotte. 3 bed 2 bath home for $55,500.00 • Tax Value $101,900.00 $593.00 Net cash Flow Pricing $55,500.00 Property Location 1825 remount Rd Charlotte, NC 28208 Features Bedrooms: 3 Bathrooms: 2

We can provide everything an investor would need to make a sound decision. We have you covered every step of the way from planning, based on your financial goals, to property acquisition and property rehabilitation.
We have been doing Real Estate Investing for the last 18 years and mortgage for the last 15 years. We have the experience and know how to get deals done. Whether your looking for a home to make a quick return on, or homes that produce a constant cash flow. We will find you what you are looking for!

This home is located near downtown Charlotte NC. It is a newer 3 bed 2 bath home and will rent for $850.00 a month. With the sales price being half of the current tax value it’s a steal at $55,500.00 and netting $593.00 a month cash flow. It is near schools, employment and shopping and less than 5 minutes to down town Charlotte. Don’t let this one slip away.

Breakdown: Rent: $850.00 Approximate taxes: $122.00 Insurance: $50.00 Property Management: $85.00

Total Expenses: $257.00 Net Cash Flow: $593.00 Cash on Cash Return: 14%

Carolina Liquidator made the buying process so easy. I would definitely recommend their services to anyone who is looking at investing in a home...


Market Spotlight: Rock Hill, SC
LOCATIONS: Rock Hill, South Carolina Charlotte, North Carolina Atlanta, Georgia COMPANY: Carolina Liquidator CONTACT: Kevin & Alex ph: (803) 325-1925 Question: What kind of opportunities are you seeing in your market? Answer: We currently have a 67 house package that we are working on. It is not only a great opportunity for us but for investors who are interested in this package. About half of the homes are currently rented and we should be able to place tenants in the other homes very easily. This is a once in a life time deal for our company, to buy so many of these homes, rehab them, and get tenants in them. It is a big challenge for our company, but we have a great team, and we are up for the challenge. This is just one of the projects that we have currently going, we have many smaller deals also, many in the $30,000 dollar range. Q: How is your market handling the economic slump? A: Being based in the Charlotte, NC area, we haven’t felt the effects quiet as heavily as other cities, but we have noticed an increase in the number of tenants interested in our rent to own program. More people in the area are looking to rent but still have a desire to own their own home. With a rentto-own program, we are able to place good tenants in these homes who will pay each month because they want to own the home. This is real simple, the properties values are down and the rents are staying the same or even going higher than previous years in some occasions. Just to give you an idea, we have several homes available in the mid $30,000s that are net cash flowing over $400 a month with cash purchases. Q: What is the best part of being an investor in your city? A: We handle everything for the investor; it is a total turnkey process for the passive investor. We take care of our tenants just as well as we take care of our investors. After all, these are the people who are putting money into your retirement. They are

as much a part of the team as anyone else involved. It is kind of shocking to some of the investors when they come out to visit our office because we have so much community support, we have churches and community leaders that work with us to help keep the areas clean and safe. Q: Why should investors buy rentals in your area? A: Investors should buy rentals in our area because we have good, hard working people living in our homes. People who rent

is figure out what you are looking for and what your goals are and we put scenarios together that will help you achieve those goals. We have a great team that works daily on achieving the goals of our investors. Our team includes our research specialist, Emily Harris; property manager/ office manager, Cherry Stegall; and general contractor, Bennett James. These three work to keep the daily operations of our office moving so that we can continue to find deals for our investors. Q: How long have you personally been

Alex Franks and Kevin Burrell

our homes are mostly blue collar workers who make a living by working anywhere from retail stores to our local industrial plants. For a very small investment, you can turn a very good income. Literally for what you could buy a car for, you can buy real estate in our markets with a net cash flow of more than $400 a month. Just about every home we have is under $50,000, with the majority being in the $30,000 range. Q: What makes your company unique? A: We don’t just sell real estate to people, we create portfolios, we are currently in the Charlotte, NC, Rock Hill, SC, and the Atlanta GA, areas and we are still expanding into the florida market. What we do
PAGE 27 • 2011

investing in real estate? A: Alex Franks started his real estate investing in 1999 as a way to generate passive income and long-term wealth. Starting out wholesaling deals is something he continues to actively pursue today. By 2006, he made the leap from wholesaler to a fulltime real estate investor. Kevin Burrell has 18 years experience in Real estate and 15 years in the mortgage lending business, after he bought his first house in 1994, Kevin was hooked on real estate investing. In 2008, Alex and Kevin joined forces to create Carolina Liquidator, LLC. They both specialize in being able to quickly analyze
Continued on pg. 31

Americans Flip to Australians


AZ Property Tour Explains How
vestors can combine full-time demanding careers with the flexibility and high profits that part-time real estate investing offers. REO Bailout has been acquiring, rehabbing and selling properties to wholesalers,

roperty tours offer out of area investors the perfect opportunity to learn about markets and the cash flow deals they offer. Investors who are interested in investing in Phoenix won’t want to miss out on REO Bailout’s first three-day property tour, scheduled for October 8th, 9th and 10th (see below for more information). The tour is being produced by REO Bailout, a premiere real estate investing company based in California. Owned by Mike Barker, a 20-year law enforcement professional who currently serves as a SWAT officer, Barker is a prime example of how in-

flippers and buy-and-hold investors for many years. Their expertise began in their own backyard of California and soon ex-

panded into other markets. “During the last two years we have done extensive studies on the hardest hit markets in the U.S. We have actually put people on the ground in these markets to get a first-hand look at the growth and development these areas offered. Currently, Phoenix is the destination of choice. “Arizona, and the greater Phoenix area, have shown greater growth potential and the commitment to improve infrastructure. Many Fortune 500 companies have made Phoenix their home, capitalizing on the low cost of housing and low tax base. It is because of this commitment and their actions to improve this city that we feel Phoenix is the best fit for us at this time.” Investors can have a variety of cash-flow deals to choose from, Barker explains, “from condos, single family residences,
Continued on pg. 57

Meet the nation’s top power team with thousands of successful deals.
• • • • We’ve researched the Markets Negotiated a deep discount on the properties Work with Experienced Contractors Either BUY, FIX and FLIP or BUY, FIX and HOLD for Cash Flow • Financing is Available-No Cedit Required
• Immediate Equity • Undevalued Properties • Instant Positive Cash Flow • Licensed Property • Income and Appreciation Managment Companies

Real Estate Buying Tour!

Benefits of Investing in Phoenix

Join Us For 3 Days of Education & Action Taking!

FOR TICKET INFORMATION: Visit online: or call: (805) 876-4504 email:

Join us on the tour Oct. 8th, 9th, and 10th

When Hollywood actors and Silicon id you know creating monthly residual Valley executives want to increase their income in the stock wealth, they turn to Tyrone Jackson market is just a click away? Now is a great time to be they acquired. a stock market investor and trader. Mr. Gates and Mr. Buffet both follow a In the last fifty-two weeks, shares of companies like Netflix (ticker NFLX) have risen simple formula. Make your money on Wall from $95 per share to over $300 per share. Street and invest the profits in real estate. Similarly, shares of athletic yoga apparel Why stocks? Stocks are easy to buy and maker LULU Lemon (ticker LULU) have sell. As a stock market investor, you have gone from a fifty-two week low of $15 to the advantage of being able to trade from anywhere in the world as long as you have $64. That’s a400% percent increase. This year has seen explosive growth in internet access. Next, when you buy and stock prices and there’s more to come. Is sell stocks there are no credit checks, closit a big surprise to the experienced trader ing costs, title searches or PMI (Protective and investor? The answers is no. Here’s Mortgage Insurance). It’s possible for you why: we are in the middle of a technologi- to purchase shares of a company at $50 and cal revolution. The use of hand held devices sell them a week later for $55. That’s a ten and the mobile applications that accompany percent profit. Trading stocks can be a fast or slow them are exploding worldwide. As a stock market investor, you can cash in on almost transaction. Either way, it’s a simple buy every trend you see around you. All of this low and sell high scenario. In a case like innovation is financed, in part, by investors APPLE (ticker AAPL) it’s buy high and sell even higher. Apple has a record fourlike you and me. Here’s how the game works. We pur- teen straight quarters of top line revenue chase shares of companies that are publicly growth. If you purchase shares now, the traded. The capital raised from “going pub- potential for future growth is still present. A $10,000 investment in Apple stock five lic” finances R&D, marketing and advertising. In essence, we help finance the boom. years ago would be worth $70,000 today. Our reward is evident when we purchase Monthly Income shares of let’s say XYZ stock at $50 and one year later those same shares trade for Some stocks allow you to produce monthly $120. That’s over a 100% increase in our residual income by selling covered call options. What are initial investment. How do you choose winning stocks? covered call opHere’s the big secret: on Wall Street, it’s tions you ask? It all about revenue. When a publicly traded works like this: Let’s say you company’s quarterly and annual revenues 100 rise, ninety percent of the time so does the purchased stock price. Your job is to learn how to read shares of XYZ an income statement and choose winning stock at $9.75. stocks. To do that you’ll need a financial Instead of selling XZY stock at a education. higher price after you purchased The Winning Combination The most successful investors know the the shares, you road to millions is paved when you have a sell the rights to balanced portfolio of stocks and real estate. your stock first to create guaranteed inIf we look at the two richest people in come. Selling a call option means that you America, Bill Gates and Warren Buffet, would be selling the right, not the obligathey made their billions from owning shares tion, to someone in the market place to buy in publicly traded companies. Some com- that stock away from you at the $10 price at panies they started themselves and others a later date. The buyer of the option would


Creating Wealth in the Stock Market
then pay you something called a premium. In this example the premium is $.90 per share. The price that you’ve agreed to sell the stock at is called the strike price. In this case it’s $10. So in the above example you sold a call option and earned a $.90 per share premium. Simultaneously, you agreed to sell the stock at the $10Strike Price. No matter what happens in this transaction, if the buyer decides to buy the stock from you or let the option expire, you get to keep the $.90 premium. The buyer of the option could choose to exercise that option at any time before the expiration date and pay you the full $10. If the buyer decides to exercise the option, you would be obligated to sell the stock to him or her at the $10 strike price but you would keep the $.90 premium. Let’s look at the total profit: Stock bought at $9.75 and sold at $10 = .25 per share profit or 2.5% return Plus .90 premium. = .90 per share profit or 10% Total profit on trade = 12.5% per month Great News About Future Wealth There’s still time for you to earn big bucks as a stock market investor. With Facebook and Twitter set with IPO’s (initial public offerings) planned for early 2012, you can get in on the ground floor…. sort of. With Wall Street’s fascination with “all things social media” at an all-time high, financial institutions and hedge funds are sure to bid the shares of these companies higher and higher as their profits increase. So what are you waiting for? You have a lot to be excited about. Your next move is to start to educate yourself about stock trading and investing. From there, you’ll be on the fast track with two different winning asset classes, stock and real estate. Tyrone Jackson is the founder and creator of the Wealthy Investor program. Each month, Mr. Jackson teaches beginners and seasoned stock market investors how to produce monthly income ranging from $5,000 to $30,000. Visit www. for details. A frequent radio and TV guest, Mr. Jackson welcomes your feedback, send to: feedback@ the

PAGE 29 • 2011

Property Rehab Tours
Hit Southern California


hristian and Ruth are real estate investors who are also known as the “Property Flip Pros.” They regularly take a bus load of investors around Southern California to show them their own projects and to teach them how to rehab properties. They personally are taking full advantage of the current foreclosure market. One of the best ways to learn is through experiencing things first hand, the same holds true for rehabbing properties. The best way for potential flippers to learn how to rehab properties is to learn from the pros in person. This is exactly why Christian Yepez and Ruth Ortiz decided to start providing investors with property tours. The experienced rehab duos have been flipping for 15 years. “Many investors want to do what we do, but they don’t know how,” Ruth says and adds: “We take them through the process and we tell them what we do to add value and make the property sell faster and for more money.” The tour I attended was frequented by a group of about 30 investors. All were eager to learn some real estate secrets and shortcuts. Many of the people on the tour

were already investors, most of them were looking for the type of surge in cash that only real estate can provide in today’s great foreclosure market.

New investors find this property flip tour very educational, there is a lot to learn, this is the Real World of the property flipping business. Ruth and Christian provide one of the few property bus tours in Southern California. When asked what areas they like to focus on, Christian replies: “We will go anywhere the numbers are good.” Like most experienced rehabbers, Christian and Ruth rely on a combination of private and hard money to acquire, renovate
PAGE 30 • 2011

and carry the property until it’s sold to a retail buyer. They rely on good business relationships with REO brokers and real estate agents who bring them deals often. They also utilize well trained virtual assistants to scout different multiple listing services for deals and also to help them submit low ball offers. Many offers need to be made before one sticks. “Sometimes we’ll land a deal that we forgot we made an offer on,” chuckles Ruth. In addition to scouring the MLS, Christian and Ruth buy properties at auction and pick up discounted REOs and shortsales, they also on occasion work with distressed owners and negotiate short sales. Being bilingual (English/Spanish) gives the team a competitive edge in bargaining directly with contractors for the best rehab estimates. “Cost is a big factor in the success of a rehab, we try and hire the most affordable crew we can even if it means having to supervise them more,” admits Ruth. The last entire home rehab they completed cost only $25,000. Regular price for the same project elsewhere runs around $40,000. That price includes a new kitchen, new two bathroom remodels, new floors

new interior and exterior paint, new landscape and other smaller upgrades, such as new appliances. What struck me most about Ruth and Christian’s tour is the fact that they so generally reveal all their secrets. They also encourage you to use their team for their own projects, including hiring their assistants, handymen and gardeners. “We don’t mind giving our secrets away,” Christian says, adding: “Because the truth is most investors can’t do what we do because real estate is not that easy. You have to take action, you have to work to find deals, you have to be creative and make fast decisions.” Rehabbing a property is not for the weak at heart, it takes a lot of time, energy and knowledge. Once investors realize how time intensive it is, many opt to instead lend their available funds to other rehabbers, like Christian and Ruth. In this way, the investor can still be part of a re-

Market Spotlight, pg. 27

deals, putting creative deals together that seem impossible and approaching deals from every angle. They are willing to share their knowledge with other investors and help them with their real estate goals. They are active spokesmen to several real estate seminars and radio shows. Carolina Liquidator has easily been involved

first house in 1994, Kevin was hooked on investing. Kevin specializes in being able to quickly analyze deals, putting creative deals together that seem impossible and approaching deals from every angle. He is willing to share his knowledge with other investors and help them with their real estate goals. Q: Are there any special financing or programs available that investors should know about? The best deals will always be cash deals, but we still offer 20% down deals, we also have some new finance options in the works, which we should be launching soon, but we’re keeping that a secret! Q: What is your real estate or management philosophy? Our team philosophy is simple, Don’t sell something that I would not buy my self. Make sure to treat tenants like family but always keep strict rules and abide by them. At the end of the day real estate is still an investment so make sure to have goals and structure each deal to align with these goals. Q: What tips or advice do you have for our readers? A: The best advice we can give someone is to do your homework. Educate yourself on real estate investments, and according to your financial situation, find the type of deal that works best for you, whether that be commercial, cash flow rentals, or retail. Prepare yourself so that you understand all the positives and negatives of buying real estate. Once you feel prepared, find a team that fits you. Our advice to people new to investing is to only buy one or two properties, that way you can analyze your experience and fix any flaws before you make any other decisions on any other deals. Make sure you are dealing with a solid team with reputable references.

hab but not be directly involved. “We have investors who like to do rehabs with us and it works great. We find the deal, handle the work and sell the property. They get a great, steady return, and they can be involved in a rehab without doing the work. It’s a win/ win for everyone,” she says with a smile. Christian and Ruth will continue doing rehab tours with their own properties, if you are interClaim Your ested in learning Free Gift Below how to be a part of this incredible experience, visit their website or call them. In addition, once you go to their website, they have a FREE GIFT for you, something that you can use for you real estate business today. realty411 or call: 562-304-7787

in more than 100 real estate deals in the York County, South Carolina area. Many investments range in prices from $10,000 to $2.5 million. They continue to invest in real estate, grow and develop a stronger property management company, while spending more and more time consulting real estate investors on the happenings in today’s market. Kevin Burrell, along with Alex Franks, are founders and managing partners of Carolina Liquidator. They manage all aspects of real estate investments, including buying, selling, construction rehab, and property management. Kevin spent 15 years as a mortgage loan officer and has been doing real estate for the last 18 years. Drawing on 18 years experience in real estate and 15 years in mortgage lending, Kevin now focuses mainly on real estate wholesaling. After he bought his

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PAGE 31 • 2011


his is an amazing time to invest in real estate. You can invest almost anywhere, in almost any kind of property, and profit handsomely. Yet many people will jump into the market, lose considerable cash, and drop out of the market, only to miss out on the greatest opportunity of their lifetime. Others, with significantly fewer resources, will amass considerable wealth. What’s the

difference? Persistence, patience and thorough homework are critical deciding factors. Successful investors develop a plan, research diligently, and persist. In addition, successful investors understand the impact of a single variable — TIME. Do you understand how time impacts your real estate activities? Understanding this single variable can increase your focus, extend your patience, and give you the confidence to persist. Let’s explore how time is the critical linkage between fix/flip, buy/hold, cash flow/appreciation and success in real estate investing. How do you make money in real estate? Appreciation or cash flow? Both response are true, so what’s the difference? One word — TIME. For example. suppose you buy a property at 95% of market value, that produces a cash flow of 25% cash-on-cash. The cash-on-cash return is also called the internal rate of return (IRR). Note this is not the total return on investment (ROI). The ROI depends upon how long you hold the investment — time. Are you satisfied with a property that cost you 95% of market value and produces 25% IRR? That depends upon your TIME horizon. If you work at the business of fix/ flip and expect to sell the property in 3-6 months, then you may not be satisfied with a 5% bump in price and a total cash flow of 6% on your investment. It gets worse. Perhaps you needed three months to get the property rehabbed and rented, you may have lost money on the cash flow because the property was vacant and you have some interest cost on your invested funds. Time offers different rewards and sets different traps for each type of real estate investor. Time for Fix/Flippers For the short-time horizon of a fix/flipper,

What is Your Real Estate Time?
went wrong somehow, you cannot cure it by setting a high sale price and waiting for an unsuspecting buyer to bail you out. Your business is fixing and flipping, not holding. The cash you tied up in the project is not an investment; it is truly working capital that you use to run your business. If you borrowed “hard money” to do the project, you probably have a time-bomb ticking. When you have fixed the property, you must flip it, at the market price, or even at a discount to make sure it moves quickly. Time traps awaiting short-term investors (fix and flippers): Homework time trap: Time cannot cure a high purchase price. To succeed, you must buy low or walk away. Emotional Time Trap: Time cannot cure a busted project. If the project went wrong, take the loss and flip it anyway. If you don’t, you are out of business. Time rewards the fix/flipper who moves swiftly. If you make many offers swiftly, eventually some seller will take your lowball offer. The faster you make many offers, the faster you get one accepted. Go fast on the buying end of the project. The same goes for the fixing. The faster you fix the property, the faster you can sell it. The same goes for selling. Cut the price and offer some sweeteners to the buyer who can move quickly. Make your profit on the purchase, take your profit on the sale, and move on to the next one. Speed is one secret for fix/flippers. Time rewards the fast fix/flipper with more projects, lower holding costs, and more total profit. Time for Buy/Hold Real Estate Investors For a long-term buy/hold real estate investor, time works differently, setting two different traps, both at the front end. Both appreciation and cash flow can work for the
PAGE 33 • 2011

time sets a trap at both ends of the transaction. If you buy too high, you cannot wait for value appreciation and the cash flow to bail you out. So, with a short-time horizon you must focus on a single variable — your purchase price. If your purchase price is low enough, you will profit in the short term. If you pay too much, it’s difficult to profit in a short term. Time sets an emotional trap when you get ready to flip your property. As a rehabber your business is flipping. If the project

long-term investor, so the purchase price is not as critical, although buying low is always an advantage. Time sets a homework trap with an infinity of choices. You can look at any type of property, from singlefamily to multi-unit to commercial or even industrial and raw land. You can look at property everywhere, from North Dakota to New York City, from El Salvador to Thailand. How do you narrow the choices? Get lost in the analysis and you never buy any property at all. Don’t do the homework

and you end up with a condo in Detroit or Miami that you cannot rent and you cannot afford the HOA fees. You need a strategy to identify locations and properties that will hold value and grow for at least a decade. What’s your plan? Probably you cannot afford negative cash flow for ten years, or even longer, while the beach-front property in Paraguay increases in value. Oh, wait. Does Paraguay even have a beach-front? Long-term property investment requires positive cash flow. A little plug here for RBS Homes: we have analyzed over 500 major metro areas to identify the very few cities that will show long-term growth in property value and rental income for the next ten years. Call me (925-858-9017) to find out how. The Final Time Trap: Is now the right time to buy? A few points may be helpful if you are sitting on the fence just waiting to jump into real estate “when the time is right.” •Mortgage rates are at all time lows. •Property values have dropped 20% - 35% nationwide, and more in some areas. •New construction has dropped to the lowest rate since World War II. •Real estate investments are producing cash returns of 12% -35%, depending upon the region you choose. •Have you checked your stock portfolio lately? How’s that working for you? In closing, I’ll answer the question of the final time trap with another question: If not now, when? With my very best wishes for your success in real estate investing, Richard Barrett, Partner RBS Homes, ph: 925-858-9017

The Coach’s Corner
Dr. Tingley mentors students & helps them achieve success
In Memory: We regret to inform readers that Dr. Richard Tingley passed away in early August.

i everyone! I have been involved in real estate for the last 30 years and I have been coaching for the last 16 years. I have coached for Carlson Sheets, AD Kessler, Robert Allen, Al Lowry, and most recently for Armando Montelongo. Each program was unique depending upon how the “guru” wanted his material presented. I have really enjoyed my time with each of these individuals and over the years have picked up many great ideas. Today, I want to talk about how to buy, fix and flip a house. I would like to focus on the formula to choose a home you wish to buy, fix and flip. The first thing is to know what the home will sell for, once it’s fixed


up. When I go out with a REALTOR® to look at a property, I ask them to provide two or three comparables for each of the properties I am considering. The comparables should be just normal properties, not REO or short sales. Once I look at the comparables, I will generally do a formulation like this:

Once we get the 70% price, you subtract out the cost of repairs and the cost of getting a hard money lender.
I will take 70% of the comparables. I do know that most lenders wish to loan 65% but your chance of getting a property at 65% are slim to nil. Once we get the 70% price, you subtract out the cost of repairs and the cost of getting a hard money lender. What is left is what you can safely pay for

the home. Presenting this offer works best when you are making it on a bank-owned property. You have to take the rehab cost and the cost of the loan into consideration so that there is a profit margin for you. For example, let’s say the after repair value (ARV) is $200,000. The REALTOR® has shown a few comparables to confirm that the home we are looking at is worth $200,000. Here is an example: 200,000 X .70 = $140,000 minus $20,000 for rehab cost (The typical cost of minor rehab). Take this $120,000 subtract $14,000 for hard money costs = $106,000. This is what you would typically pay for the house. To purchase Dr. Tingley’s book or learn more about his legacy, please visit:



LOCATION: Phoenix, Ariz. COMPANY: Whiterock Capital, Inc. CONTACT: Richard Edrosolin or Clarence Eleccion (888) 289-0221

Market Spotlight: Phoenix, AZ

eople in California are used to commuting long hours for work, but one investor is adding more miles than usual on his odometer. Richard Edrosolan, CEO and founder of Whiterock Capital, leaves his golf course estate near the Pacific Ocean (in Ventura County) to go to a red hot market: Phoenix, AZ. “I’m doing four rehabs there right now,” says the 30-year real estate vet- eran. Richard works short sales, REOs and trust deeds. He has experience in buying at both the California and Arizona auctions. “I just finished three rehabs in California and I’m doing two more as well. ”He has rehabbed properties throughout Southern California, including Los Angeles, Ventura and San Bernardino counties. The reason the California rehabber went out of state is purely financial. “The price points are so different here,” he says during a telephone interview. “A house that in California would be about $700,000 will cost around $175,000 here,” he says. “You can make 18% to 20% return without batting an eye.” Edrosolan was also lured to Arizona by cheap labor and supply costs. “I can get a whole house done for under $8,000,” he explains. The master rehabber has worked multiple markets around the nation, including: Georgia, Utah, Texas, Washington, Nevada, South Carolina and Hawaii. His quest for cash flow and diversification led him outside of his home state early on. “I realized early on that it was foolish to only work the California market because it was foolish to tie up so much money just in one deal. Phoenix is great because California investors can go back and forth easily.” One of the Richard’s niches is to find absolutely discounted deals for himself as well as the investors that entrust him with the privilege of expanding their portfolios. Another of Richard’s niches is to find absolutely discounted deals, which are purchased for cash. The properties are then resold to locals at market value, with seller financing in place. The new buyers happily pay him a large cash down payment and they are willing to pay higher interest rates in exchange for the opportunity to own a home. Richard can find investors solid rentals in the $20,000 to $70,000 range, generating anywhere from $650 to $800 month in rents. Typically, he likes to buy in working class areas and his bilingual skills serve him in dealing with his mostly Spanish-speaking Arizonian retail home buyers. Currently, he is picking up as many rentals as he can for himself

and his clients. He recommends that other investors start or expand their portfolio by adding in some Arizona rentals. For clients who are not interested in landlording but are looking for passive income, He has a private lending program where investors receive 10% interest on their funds, secured by a first position title on the property. He says “We can customize an investing plan for anyone!” Arizona is providing Richard and his investors with such great cash-flow that he plans on “bouncing back and forth” for a long time. He adds: “I have great people around me. I have a great team and we work hand in hand. Richard’s quest for rock-bottom deals and passive income for himself and his clients has taken him to many places around the country, yet Arizona’s close proximity and high returns will make him a part-time Phoenix resident for years to come.

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Top 20 Excuses for
by Bill J. Gatten, NARSCor, LLC


xamine a few selections from the Top-Ten List of the Best Excuses for Failing, and see if any apply to you (…and remember: “He who hesitates almost always wishes he hadn’t,” and “excuses and reasons are virtually indistinguishable, and good reasons for failure.) In my business of teaching Creative Real Estate buying, selling, investing and managing I am always astonished at the number of people who subscribe to my training and mentoring programs and consider it the finest financial choice they ever made… then never do a single transaction. I’m told that the industry average is something like 5%. In other words, of the people who buy books and courses and attend the seminars, 95% never do anything with the education they paid for and receive. When I discovered this I was appalled, but in checking our own records I found that we were slightly ahead of most, but not by much…about 7% versus 5%. A dear friend, now deceased, A.D. Kessler, upon discovering this ratio of success versus failure decided to do something about it by putting a $100 cashier’s check in each of his materials packages and counting the number of checks that actually came back cashed. He came up with the same percent, 5%. In order to better this mark he began offering ongoing training, personal coaching, and newsletters, annual re-treat meetings and so on. His result? He increased his success rate to about 8% - 9%. By following his lead, we are able to get about the same results (7% - 8% at last count). Folks, this is terrible and wholly unacceptable! After reading this article I’d like to have ANYONE tell me why anyone with half a brain doing no more than reading this article couldn’t make a ton of money in a short time. I’m prepared to see our numbers remain stable if I have to, but I will still scream to the heavens that I don’t know why this has to be the case. What’s so difficult here? ‘Find an unwanted property…find an unwanted buyer who wants the property, take it off the owner’s hands…then squeeze them together until the money squirts out. That’s it! It’s merely

a matter of knowing how to do that and breaking some mental molds. THE LIST 1.“I do everything my mentor and the gurus tell me to, but appreciation’s so good in my area that sellers don’t want to make deals” 2“I do everything the gurus tell me to, but prospective buyers are broke and equity is non-existent” 3.“I keep on trying, but the financial condition of the country, and especially in MY area, is just too tough to be able to make any money” 4.“I keep plugging away, but there’s a rental shortage here and sellers are unwilling to make deals because they can rent a house out in a minute for more than normal rent” 5.“I want to buy and hold, but rentals abound here, and the competition and the economy, eliminates any chance for breakeven rents” 6. “I do everything I can, but rentals in my area are scarce and rents are high, so nobody wants to let their properties go” 7. “I tried, but found too much competition out there” 8. “The course says don’t deal with REALTORS® and to go after the fixer-flips; but FSBO fixer-upper prospects with any equity at all are just nowhere to be found” 9. “I’ve called a few prospects, but REALTORS® in my area don’t want to work with Creative Finance types like me” 10. “I’ve bought a bunch of No-Money Down courses, and the techniques taught all sound good at first, but just don’t work for me” 11. “I try to talk to potential sellers by the dozens, but they figure me out right away and are not interested in “creative financing” 12.“One has to have money and decent credit in order to make money and I don’t have either” 13. “Every time I find what I think might be a deal, I find out that the property is over-encumbered and fraught with back payments and unpaid taxes” 14. “People who sell books and courses make their money from selling books and
PAGE 36 • 2011


courses and don’t do what they teach, and have no contact with reality” 15. “When I see how many foreclosures are happening and how many investors are losing money, I can’t bring myself to jump into what is obviously a losing business” 16. “Every guru I get involved with who has made a ton of money on creative financing made it a long time ago and is now either broke or almost broke” 17. “I just don’t have enough hours in a day, working my own job plus trying to be a real estate investor” 18. “I joined a real estate investment club and find that 75% of the people there have never bought a stick of property and the 25% who have are people with money and good credit” 19. “I want to be wealthy, but can’t bring myself to change my job or my lifestyle and take those kind of chances” 20. “I bought three properties two years and followed all the rules, but as soon as I got them the bottom fell out of the market and I lost them along with my life’s savings and all my good credit and am now close to being sued by the lenders for my deficiencies and back payments” Free Houses. Now let’s go back and count the number of these excuses that apply to you (if any) and how many of those are actually based upon insurmountable obstacles, and how many are no more than excuses for not doing what needs to be done.. Then let’s see how many of those excuses become foundationless when one adopts the use of the © Title Holding Land Trust Transfer via the NARSCor PACTrust™ or NEHTrust™. This is to say the property is placed into a specialized inter vivos trust by the seller with payments being taken over by you as the seller’s co-beneficiary, whereupon you appoint a third-party as a resident cobeneficiary who lives in the property, covering all mortgage payments, property tax

and insurance, thereby leaving you with a bit of a positive cash flow and a large share in future equity build-up from principal reduction and appreciation… and all without credit qualifying or a down payment. Remember that this type of “seller” is not worried about money upfront (as there is no equity to sell) or allowing you and your resident co-beneficiary take over his Pain and get him away from his cash-drain and the threat of foreclosure and deficiency judgment. Your resident beneficiary is not concerned about the over encumbrance, as he only cares about an affordable payment and a much nicer home than he could ever afford otherwise. Also… if the monthly payment is way out of line for that type of property, the seller (relinquishing party) won’t mind paying a part of it (perhaps just the property tax and/or insurance), which will be a lot better for him than the amount he’s been paying: i.e., the full mortgage payments PLUS property tax, insurance and homeowner’s association dues. In the above scenario, ask yourself whose credit is at risk here; who is making the payments for you; who is getting a free house (or part of one); and who has a virtually risk-free real estate investment despite having had no cash or credit to start off with. Want more free houses? NARSCor offers a mortgage amelioration program whereby we effect mortgage loan elimination, and then sell the property, sharing our proceeds with our finders and network members at the rate of 10 to 50 percent of our profit potential. (For example, on a $1 million eliminated or compromised mortgage, depending upon your status with us (Finder or paid Network Member), you either get $50,000, $125,000 or

$250,000 when I sell the property following our expungement of the loan. Our success thus far = 100 plus transactions closed; 150 in various stages of progress and 15 new closures in final negotiations. To initiate handling for a homeowner (in foreclosure or not…even after the bank’s sale of the property), we need $7,995 upfront for a refundable Trust Contingency Fund in order to handle the transaction, and that money is always fully refunded (100%) in full whether we would be successful or not. More free houses? Bring us a short sale that we can close and you’ll end-up with 10, 25 or 50 percent of the profit upon re-sale. More? Find a large, furnished home that would be desirable as a prime vacation home, that is (may be) overencumbered (and where the payments are too high for the owner); then agree to take over the payments and management responsibilities. You then put the property into the NEHTrust™ and bring in as many co-beneficiaries as you want who will use the property for a specified number of days or weeks per-year. Divide the current monthly obligation by 10 or 12 to establish what each of your co-beneficiaries will pay per-month for their share, and you then charge, say $10,000 to $15,000 from each party for their respective “time share” rights. It’s easy to calculate what your up front moneys are going to be and how much monthly positive cash flow you will have with, say, twenty co-beneficiaries. A couple of these might set you up nicely for life. Be sure to read the second part of this article, with the answers to The List in the next issue! For information on Bill Gatten, email


BILL GATTEN CENTER for Wealth & Education 6520 Platt Ave., St. 548 West Hills, CA 91307 1 800 409 3444 FAX 1 800 967 0333

Renowned Author National Lecturer & Investor

Bill Gatten

PAGE 37 • 2011

very, GARY BOMERSHINE very little work, but you GEORGE ANTONE Gary’s strong domainreceive all the profits. We call exOver the past five years, Mr. pertise in creative realthat passive income estate Antone has established his transactions, sales & marreputation as an expert in . is a secret keting, give him a unique the fields of private money sses available online nationwide INVESTORS VS. ability to work with lending and trust deed BANKERS entreTestimonials that will preneurs looking to investing, want you to realize that grow We and has become a make nationwide “I was completely very urses available online you blown away with their business. national speaker and teacher therich. Whatamount you learn, the quality, the is the this subjects. on the is coming from a place and Audios available information...” Jay Biggs amount secret in Mowhere we have been on both one of online WealthClasses TV 24 hours a day sides. We’ve been investors and “... nopoly that allows be MEGA Milwe were mentored to Gary Boomershine and George Antone GEORGE ANTONE been bankers or lenders. wide Mastery Classes, Workwe’ve lionairesto win game breakthrough you through George’s CONTACTfive years,LEARN MORE: US TO Mr. Over the past nd Seminars offered live on Lim system...” Dakota time? We want you to see both sides every single Antone has established his ds Wealth Classes, LLC. experience. and an speak from reputation aswe expert in “... Now, someseminar on might say buy four it’s a fantastic people really under1255 Treat Blvd So let’s standing homes and then a hotel. Well, the fields of private money green monialslookingcreative and uncoventional ways that is 230trust deedtake a banker versus investor lending and Suite at at cashflow... ”Anand Ayyar and let’s look at the investing, and has become a pletely blown away with Walnut Creek, CA 94597 comparison. First national speaker and teacher , the amount you learn, the on the subjects. off, as an investor, information...” Jay Biggs Support: particularly a real (888) 888-3612 mentored to be MEGA Milestate investor, you a good guess but that hrough George’s breakthrough there is no guarantee TO LEARN MORE: CONTACT US Fax: have to go out and learn the techniques. For you will win. Dakota Lim (925) We’re talking about the secret that allows 287-1653 that means either learning how Wealth Classes, LLC. most people tastic seminar on really underyou to win ways game 1255 Treat Blvd the every single time. to wholesale or do short sale deals, or buy eative and uncoventional VISIT OUR WEBSITE@ Some people buy Boardwalk and apartments, buy bank owned REOs, vacant at cashflow... ”Anand Ayyar might say Suite 230 Walnut Creek, CA land, Park Place. That is another good guess, but94597 etc. Many of you have spent literally there is no guarantee that anyone is going tens of thousands and in some cases even a Support: to land on these sections, so there is no way lot more learning all of these techniques. (888) 888-3612 You then have to figure out how to marto guarantee that you are going to win the ket in a competing market for all of these game every single time.Fax: We’re talking about a secret that allows deals. Most people have to send out post(925) 287-1653 you to win the game every single time you cards or letters or buy Web sites and spend VISIT OUR WEBSITE@ play. What is that one secret? It turns out it a huge amount of money on marketing. is being the bank. If you think about it, in Then they have to deal with sellers and the game you’ve got up to six investors run- talk to sellers, in some cases they have to ning around trying to buy all the land, try- deal with REALTORS®, they have to find ing to build on the land, etc. And ultimately buyers, sometimes wholesale buyers, they one person out of the six will win the game. have to deal with tenants and toilets, they The banker always wins the game. Think have to work with contractors and rehabbers and all the headaches. They write ofabout that for a second. Now, in reality and in life, if you think fers and in some cases dozens and dozens about it there are many, many investors of offers before they get any accepted. Once they have those offers, then they out there and only a few make it. But the bankers always win. We want you to think have to go talk with lenders or bankers to about the game of Monopoly as really two get the money and get access to the money. games; there is the banker’s game and then They have to deal with tenants if they are there is the investor’s game. In real life it’s holding properties or holding apartments. the same thing; you have the banker’s game They have to go out and deal with all the tenants and all the problems with tenants. and you’ve got the investor’s game. In Monopoly, you can actually own all They have to make the repairs and fix ups the real estate and still run out of money. and deal with problems that can go wrong. You can have apartments, but if you run And they are typically the last to make any out of money you start having to turn those money. Now let’s look at the comparison of the Monopoly cards over and leverage just like banker. First off, you don’t actually have to in real life. When you run out of money and you have no more cash flow as a real estate go and learn all the techniques of buying investor, you go broke. We have seen liter- and selling and wholesaling. You learn one ally thousands of people have that happen. thing and that is how to become the banker Some of you may be thinking that being and what we call The Banker’s Code. You the banker isn’t a whole lot of fun because don’t have to do any marketing. All the you just sit back. Well, similarly for being hard work is done by the real estate invesbank, you can collect the big profits and do tors, you don’t deal with sellers, you don’t

hClasses offers both online nationwide • Live Courses available uctory & advanced • Videos and Audios available online : through WealthClasses TV 24 hours a day

n the game ed Classes available online na- Classes, Work• Nationwide Mastery e 24 hours a day and Seminars offered live on shops, of Monopoly there weekends sses available online nationwide


preneurs MEET OURlooking to grow their business. TEAM


deal with REALTORS®. You don’t deal with buyers or tenants. You don’t have to write any offers. You see, instead of dealing with lenders, you are the bank and you get to deal with those hungry borrowers and investors out there who are finding incredible deals. The best part is that now they are coming to you to get their deals funded. Lastly, you don’t have to deal with tenants, you don’t have to do any of the fix ups, you don’t have to deal with any of the problems, and you are the first to make the money. Because who always gets paid first? The Banker. One thing that is not obvious here is that as a banker you never have to get a mortgage. As an investor, you still have to get a mortgage. As a banker, you don’t have to have good credit. In fact, you don’t have to have any cash. The investor needs to have both of them. Let’s just say the bank is lending money to three different people. One is a wholesaler, one is an expert in short sales, and has been doing it for ten years and the other person is an expert in rehabbing properties and has been doing it for eight years and has a whole crew. What is happening here is that the lender is leveraging all of these people’s experience without having to go out and go to a seminar and learn how to do all of this stuff. What they are doing is leveraging all three borrower’s experience and they are the first ones to make the money. So you have someone else learning how to do all of this on their dime and the bank is benefiting from all of that and leveraging all these people’s time. One of the questions that has come up is around the marketing. How does a banker get around marketing? When a real estate investor goes out and does all the work and finds the deals, what do they need to do? They need to get them funded. There are tens of thousands, if not hundreds of thousands of incredible real estate deals that real estate investors are looking to get funded. So it is one of the easiest things to find great deals. In fact, at the Banker’s Code Seminar (, we spent a lot of time practicing and a lot time walking through exactly how to find all these great deals. Be sure to get the continuation of this rep o r t a t : w w w. We a l t h C l a s s e s . c o m / Realty411

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Meet a new breed of real estate investors. They’re young, hip and... female!
������������������������������ ������������� ����������� ���� �� ���������� ����� ����� ������� ������������������������������ ������� ������ ������ ������� ���������������������������������� ������� �������� �������� ����� �������������������������������� ������ ������ ����� ������� ����������������������������� ��������������������������������� ��������������������������������� ������������������������������� ��� ����� ��� ���� ���� ��� ������������������������������ ���� ������� ������������ �������������� ���������������� ������������� ����������������� ���������������� ������������������� ��� �� ���� ��� ���� �������� ��� ���� ����� ���� ������ ����������� ����� ������������������ �������������������� ��� ���� ��� �� ������ ���������� ���������� ������� ���������� ���������������� ��������� �������� �������������� ����� �������� ��� �������� ��� ���� ������������������ ��������������� Photograph above from left: Kathy Fettke, Lori Greymont, Terica Kindred and Missy McCall ���������������� �������������������� Kaaren Hall, Erica Reynolds and Crystal Han Photograph below from left: ����� ��������� ������ ������ ���� ���� ��� ���� ������� �������������������������������� ����������� ��������������������������������� ������������������������������ ��������������������������������� ������������������������������� ��� �������� ���� ����� ����� ��� ���������� ����� ������� ��� ������������ ���������������������������� ��������������������� ������������������������������ ������������������������������� �������������������� ������������������������������ �������������������������������� ����� ��������� �������� �� ���� ���������������������������������� �������������������������������� ������ ���� ���� ������� ��� ����� ���� ��� ����������� ��������� ���������������������������������� ������������������������������������� ���� ������� ����� ��� ������ ������������������������������ ������ ������ ���� ����� ���� ��������� ������ ���� ����� �������������������������������� �������������������������������� ����������������������������� �������������������������� ������ ���� ��� ���� ������� ��� ������ ���� ���� ������� ����������������������������� ������������������� Welcome to the Real Estate Divas section, featuring������������������������������ ��� ���� ������� ��� ���� ������� some of the most influential wom����� ����� ����� ����� ������ �� ����������������������������� en in the industry today. Their expertise ��������� �� ����� ����������������� �������� ���� �������� REOs, syndications, fixranges from bulk��� ���� ������ ���� ������������������������������� ����������������������������� ������������������������������� and-flips, IRA investing and landlording. ���������������������������� ���������������������������� While their ����� �������������� ���� creation ��� strategies for wealth ����������������������������������� ����������������������������� may vary, they all share the same goal: Linda Pliagas �������������������������������� ���� ������������ ���publisher founder & ������� To create a cash-flowing and appreciating���� ���� ����������� ����������������������������� �������� portfolio ���������������������������������� families. for their clients and their ��������������� ������� ������ ������������������������������������ ���������������������������� �������������������������������� ���������������������

���������������������� Estate Meet the Real ����������� ������������������ ���� ������� ������� �

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PAGE 39 • 2011 ���������������������������������������������������������������������������������������������������������������������������������������������

��������������������������������� ��������������������������������� ������������������������������� ��� ����� ��� ���� ���� ��� ������������������������������ ���� ������� ������������ �������������� ���������������� s nvestor estate, you can quit ������������� ����������������� all fondly your day job.” In ���������������� ������������������� remember fact, her system can ��� �� ���� ��� ���� �������� the ���� ��� heyday emancipate 9-to-5ers ����� by ������ ����������� ����� of real esforever ����replacing ������������������ �������������������� tate a few their income with years ago. A magimonthly rental cash ��� ���� ��� �� ������ ���������� cal time when flow. ���������� ������� ����������no money �������� “My properties are ���������������� ���������was needed for silly things��� like deeply discounted �������������� ����� �������� down payments and and they ��� ���� �������� are re������������������ ��������������� acquisition costs. If habbed, rented and ���������������� �������������������� ����� ��������� ������ ������ ���� ���� ��� ���� ������� �������������������������������� ����������� ��������������������������������� ������������������������������ ��������������������������������� ������������������������������� ��� �������� ���� ����� ����� ��� ���������� ����� ������� ��� ������������ ���������������������������� ��������������������� one had the motivation to be an ready to go.” At the time of the ������������������������������ ������������������������������� investor, real estate was attain- interview, she was rehabbing ��������������������reserves or ������������������������������ able regardless of properties in Atlanta (her home �������������������������������� ����� and had just finished other occupation. Well, now Terica city) ��������� �������� �� ���� ���������������������������������� �������������������������������� Kindred is bringing those days projects in Memphis and Ari������ ���� ���� ������� ��� ����� ���� ��� ����������� divides her back with her unique system. zona. Although she ��������� ���������������������������������� ������������������������������������� (see ZeroMoneyInvestment. time between Atlanta and Los ���� ������� ����� ��� ������ ������������������������������ com). “I want to help inves- Angeles, her “farm” is nation������ ������ ���� ����� tors buy property without them ���� ��������� has done deals in al. Kindred ������ ���� ����� �������������������������������� �������������������������������� having to liquidate their IRAs Indianapolis, Kansas City, St. ����������������������������� �������������������������� or savings,” she says. Louis, Jackson, Birmingham Kindred ��� ���� ������� and Memphis. ���� ������� ������ ���� says that in order to ��� ������ ���� She also does make Zero Down Deals, cre- rehabs in her home state ����������������������������� ������������������� of Calativity is key. She credits her ifornia ������� ��� ���� scouting ������������������������������ ��� ���� and she is also ������� loyal team of private and hard Chicago for future ventures. ����� ����� ����� ����� ������ �� ����������������������������� money lenders, She works multiple mar����������������� who put up the �������� ���� ��������� �� ����� funds and take on������ ���� the risk so kets, not because she likes to �������� ��� ���� ������������������������������� she can offer exceptional deals be spread out, but it is due to ����������������������������� ������������������������������� to investors around the world. necessity. “These properties are ���������������������������� ���������������������������� One thing about Kindred is not easy to find, we may have ��� ����� �������������� ���� ����������������������������������� that she’s all about systems. only two deals in one city per ����������������������������� After all, she began to work in month,” she admits. Kindred’s �������������������������������� ���� ������������ ��� ������� Corporate America after she criteria for finding deals is very ����������������������������� �������� ���� ���� ����������� graduated with a computer sci- specific, in order for Zero Down ���������������������������������� ��������������� ������� ������ ence degree from University Deals to happen, the properties ������������������������������������ ���������������������������� of California, Irvine. Kindred have to fit stringent guidelines. �������������������������������� ��������������������� expertise burned both ends of the career Kindred uses her


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candle by juggling a flexible in technology in her business ��������������������������������������������������������������������������������������������������� career as a technology consultant with real estate. However, after working for Deloitte for many years, she decided to concentrate solely on real estate. “When I was able to replace my yearly salary in one month, I knew it was time to leave,” she admits. Now, Kindred’s goal is to help others also get out of the rat race. “By leverageing real with clients: “Ninety seven percent of our investors are out of state,” she says, adding “We take pictures, video, we use Photobucket and YouTube. We also get the property examined by a third-party inspector to make sure everything is up to code before our investors close.” Besides the gratification of

What do you get when you’re a member of Pre-Paid Legal? Confidence in your daily decisions. Peace of mind with your personal affairs. Security for your family. Protection of your legal rights. Advice from courteous and concerned attorneys. Answers to your questions. Call today for more information on how to access the legal system!

Lori Fouts - Independent Associate 510.520.2753 | www.

Continued on pg. 55

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hile building has come to a complete stop in the exburbs (areas beyond the suburbs), infill projects near major metropolitan areas are hot. In fact, finished lots in good locations are becoming a rare commodity as more consumers become less willing to make long commutes. John Burns Real Estate Consulting group expects land development in good locations to increase substantially this year now that conservative bank financing has returned. Public builders are buying finished lots near large cities at a faster rate than private builders, and their market share is growing rapidly.


How to Flip Vacant Land to Developers
Does this mean you should run out and buy some land so you can sell it to a public builder? Not exactly. Slick salespeople have been hawking “land banking” for years, trying to get investors to hold land until it becomes valuable. Unfortunately, that could be a really long wait if the land is out in the exburbs where there’s already an oversupply of homes from overbuilding in the early 2000s. Holding land in the outskirts can be costly if you add the missed opportunity of creating income from that asset. Let’s say, for example, that you used your IRA to buy $100,000 worth of land that is located over an hour from the city. How long will it take before builders are needed there for the lots to become valuable? Based on the amount of inventory for sale today, it could take decades. If you invested that $100,000 to buy a home instead of land, you could earn $10,000 net income each year. After 10 years, you would have doubled your money. Would the lot out in the booonies double in value over that amount of time? No one knows for sure, but we do know that one strategy is predictable and the other is speculative. At Real Wealth Network, we have found that infill projects are a safer bet for land flipping, but they can be quite expensive. That’s why optioning the land can be a home-run. We recently optioned waterfront property in Alameda

article by Kathy Fettke CEO of the Real Wealth Network

that would cost $16 million to purchase, but only $2.4 million to option. We took the option! In the meantime, we will get the property entitled within 18 months, and then sell the 110 finished lots to builders for a total of $28 million. The $10 million dollar profit will be split amongst the owners and investors. In order to acquire this deal, we were able to find 48 investors to put up $50,000 each. ROI is expected to exceed 67%. To find out more about this and other projects, go to http:// alameda-terminal or sign up for a free membership at www. for cutting edge investor education and turn-key properties.

PAGE 41 • 2011


o…you’ve started on the road to real estate investing: You’ve purchased a property(ties) to add to your portfolio. You can relax, sit back and wait for those rent checks to roll in…right? NO! A critical piece of the investment puzzle is protecting your assets and that translates to two words: Property Management. A property management company in-

best case scenario would be if they have their own maintenance team. It is important to understand how you will be billed for these services. Most property managers have an “up charge” for managing the contractors. The norm for this service is between 10-20%. I have seen companies as high as 40%. If you don’t ask the question, you don’t know what you are going to be charged.

with the company. Meet with the staff, office and maintenance. Are all familiar and well-versed with current property and Fair Housing laws? Inquire as to the handling of rent collection, monthly statements, eviction procedures, knowledge of Section 8. Vacancies need to be filled as quickly as possible. What’s their vacancy rate? Average time from a tenant vacating to the new tenant’s lease signing? Effective advertis-

by Missy McCall Hammonds

The Key To Protecting Your Investments
You should ask how you are billed and if there is evidence the repairs have been made. I can’t tell you the number of clients that have told me about buying appliances for there rental that was never delivered. I picture tells the story!!! Finally, you need to know their policy on how a tenant requests a repair and their policy on when and how quickly repairs are done. The number one cause for tenants moving is a property not being maintained. A vacant property doesn’t make you money! Last, but most important, is how your money is collected? What is the procedure for the collection of rents, monthly statements, filing evictions? If they just expect the tenant to send them money on the first and don’t have a billing process, you might want to keep looking! How much are late fees? Who gets them when they are collected, and how do your receive general accounting information. What should I look for in a property management company? It’s imperative that you do your due diligence in your search for a property management company to entrust your real estate assets. Thoroughly research the company’s history: length of time in business, how many properties do they manage, do they handle both single and multifamilies. Talk with past and present clients, ask for a testimonial as to their experiences
PAGE 42 • 2011

Property Management:

sures that your investments are maintained and rented or rent-ready after a vacancy. In my opinion, whether you’re a fledgling or seasoned investor, a qualified property management company is a necessity. The everyday details and tasks of maintaining and renting properties can be daunting. We all know that time is money and your time can be better spent on finding more properties and building your portfolio and leave managing your rentals to the professionals. Why is a property manager critical? A qualified management company will prove to be invaluable. They are the key to your financial success after you have selected a perfect property. They will handle the entire rental process from marketing, showing, qualifying prospective tenants, and the lease signings. Starting with a thorough screening, which includes a background check, rental and employment verification, and contacting previous landlords. You should ask the property management company for a copy of there leasing criteria. They should have a rental procedure, in writing about how a potential tenant is evaluated and accepted. Once a tenant is occupying the property, the management company will be responsible for scheduling and completing maintenance issues, tenant disputes or concerns. Your property manager should have existing relationships with contractors and

ing is crucial to having a large pool of qualified prospective tenants to choose. We strongly encourage potential tenants to get pre-approved when we receive notice that a property will be vacated: Often, we have a deposit and tenant ready to go and our vacant-to-rented time is 0 days!! Missy McCall Hammonds has perfected the art of property management. Missy has bought and sold many properties and her company currently owns and manages in excess of 350 rental units. When asked her secret to successful property managing, the reply is to have a professional, competent maintenance and rehab team in place. As with all aspects of Missy’s success in real estate, she stresses the importance of systems for managing properties. Missy’s team of qualified professionals are skilled in rehabbing and maintaining single and multi-families. They are responsible for preparing rentals for the market, daily work orders and maintenance in addition to total rehabs of newly-purchased properties. Systems are implemented to facilitate the process of insuring that the properties are maintained and vacant-to-rental time is kept to a minimum. The maintenance team is available 24/7 for emergencies. Missy’s record of long-term tenants and reputation of quality rentals speaks volumes for her property management.

5 Years of Worry-Free Reliable Rentals!
• No Vacancies • No Maintenance Costs • No Management Fees • Already Rehabbed • Already Rented
Call Today for a FREE Report on Selecting Reliable Rentals! 513-275-1512

“Our Turn-Key homes are really that simple. We have a time-tested system to assure that you have worry-free rentals. Our repeat buyers are our proof! ” – Missy McCall Hammonds, CEO

Do you have questions? Contact Missy directly:

Retir eW ithRealEsta te.Biz

A Powerhouse Lineup of Top Industry Experts Presents the Insider’s Edge on The State of Real Estate 2011
The Norris Group’s award-winning event returns October 14, 2011 to the Nixon Library in Yorba Linda, California. We’ve booked an all-star team of accomplished industry specialists to discuss the current This year’s line up includes:

Bruce Norris President The Norris Group

Vicki Golder Immediate Past President
National Assoc. of Realtors

Sara Stephens President Elect Appraisal Institute

Sean O’Toole President Foreclosure Radar

Eric Janszen Economist & Financial Analyst of iTulip

Doug Duncan Chief Economist Fannie Mae

Deb Still 2011/12 President Elect Mortgage Bankers Assoc.


Beyond the great networking with like-minded real estate professionals, 100% of the proceeds go to I Survived Real Estate


Coldwell Banker Pioneer Real Estate Inland Empire Investors Forum (IEIF) Las Brisas Escrow

Tom Wilson Investments or 951-780-5856

Kaaren Hall of uDirect IRA Services
rmed with a 16year background in real estate, property management and mortgage lending, Kaaren Hall helps hundreds of individuals take control of their retirement. As president and founder of uDirect IRA Services, LLC, Hall educates and helps her clients invest in real estate and alternative investments using their Individual Retirement Accounts. Hall believes so strongly in the education aspect of her business that the busy mother of two travels hundreds of miles throughout Southern California to attend real estate club meetings and events. We recently asked Hall to enlighten readers about the self direction process in an effort to inspire them to be more proactive about their own retirement. Question: Why is it such an exciting time to self-direct your retirement? Answer: Well if you ask me, it’s always an exciting time to self-direct your IRA if you like being responsible for your own future. Right now is especially exciting because of the tremendous opportunities in the marketplace. Even economic down-turns create prosperity, and I see that with uDirect account holders. Because a self-directed IRA lets you invest in anything (except life insurance and collectibles), there are hundreds of possibilities. Q: Do you still come across people who are not aware of self direction? A: I do, all the time! It amazes me that after 35 plus years so many people (even sophisticated investors) do not know about selfdirected investing! I call it the “best-kept secret,” but of course, it’s no secret at all. Just visit Pub 590, which talks about IRA guidelines and goes over the rules. I think it’s because most people invest passively. That is, they have a job and put money in a 401(k) and don’t think about it. Those funds are usually invested in the stock market. So, when people leave

Question and Answer with...
their jobs and have a 401(k) to rollover, they typically think the stock market is their only option. Their investment advisor typically has no profit motive to tell them they can invest elsewhere. But for those wise few who look outside the box, they find they have a lot more power and control over their retirement money than they thought. Q: From your experience, what is the most popular type of IRA, the Roth or the Traditional? A: What I observe at uDirect IRA Services is that most people have a traditional IRA. The reason for this is that most IRAs are rolled over from employer plans. These employer plans are pre-tax plans (the account holder took a tax deduction for making the contribution) so when they rollover their funds, they find a similar account. The second most common type of account is the Roth. People love the Roth IRA because the gains are tax-free for life. You can always convert pre-tax accounts to Roth, by the way. In fact, in 2010 an act called T.I.P.R.A. created a rule that you can convert regardless of your income. When it comes to the Roth there is, however, a cap on how much you can earn to contribute. These rules are found on the IRS website and you can always ask your tax professional about what type of account best suits your tax strategy. Q: Besides real estate, what are some of popular alternative investments? A: Well real estate really is the most popular investment. Real estate comes in all sorts of forms. There’s single-family housing, apartments and commercial property. Some people like investing their retirement funds in raw land and some in passive real estate trusts (REITS). Still others will take their IRA and use it to lend money to real estate deals. Some like investing in real estate options. Aside from these kinds of investments, I see people invest in private stock. There are hundreds of private comPAGE 45 • 2011


Because a self-directed IRA lets you invest in anything (except life insurance and collectibles), there are hundreds of possibilities.
panies looking for capital, promising a return. Self-directed investors find that precious metals are the right thing for them. A self-directed IRA can purchase the bullion and we store it for them. There is a long list of investment options on our website at Q: Can you tell us about the most creative self-direction transaction that you’ve come across? A: I think the most creative transaction was a husband and wife who each had a Traditional and a Roth IRA. They bought a piece of property using all four accounts! Husbands and wives are typically disallowed to each other, but as long as they close concurrently, they can invest together using IRA funds. It’s not just the fact that there were four accounts involved (and therefore 4 wires to escrow) but it’s that they were also using a land trust. At one point, the couple realized that the four accounts were cumbersome and decided to convert the pre-tax accounts to a Roth. In order to do this the asset had to be valuated, and then it could be converted. So now their two accounts share a piece of real estate through a land trust through their self-directed IRA. Their proceeds are tax-free for life. Q. Do you have clients around the country or mostly in Southern California? uDirect IRA Services account holders are primarily in Southern California but we have clients from every state. I do a lot of speaking in Los Angeles, Orange and San Diego counties and so most of our clients come from these areas. No matter what state (or country) a person lives in, if they pay U.S. taxes, they are eligible for an IRA and we can help them self-direct their funds into the investments of their choice.

The Business of Real Estate

More Money
oes more marketing really equal more money in the real estate industry? Real estate buying, selling, listing, lending, investing, holding, wholesaling, flipping, rehabbing, developing, inspecting, appraising, insuring, and closing are all considered a business; and to make it a profitable business, one must focus their time, energy, efforts and resources marketing its business’ products and/or services to its target audience. You must first consider what your business is offering to its customers and figure out what will set you apart from the competition. The most important element is determining your mission and to create your unique mission statement that will reflect who you are, what you do, and why you do it. There are so many marketing strategies you can utilize in your real estate business and the more you do, the more money will flow to you. Branding. Creating a brand that your customers recognize with a name, slogan and/or logo is a great tool many companies use to separate themselves from their competition. It is also highly recommended to consult with a patent and

More Marketing =
mark attorney to make sure your branded name, slogan, and/or logo are available to register. Also, start to check out domains with the brand name to make sure “.com” or “.net” is available as well. Your brand should symbolize your business identity and follow your mission. Market your brand through business cards, promotional products, brochures, stationary, car magnet and/or car wraps, stickers, banners, and anything else you can think of. Our company name, 360 Investments® was created to represent an all encompassing real estate investment company that provides all the tools, research, opportunities, education, and contact sources to our selective client investors accepted into our circle. Our company name and logo has been registered with the US Patent and Trade Mark Office so no other similar names or logos can be used. We spent a lot of money protecting our marks and we consider it a wise investment. Advertising. There are many ways to advertise your business to reach its target audience such as TV/Cable, Magazines, Newspaper, Radio, Emailing Campaigns, Mailers, Postcards, Letter Campaigns, Door Hangers, Google Ad words, sponsored
PAGE 46 • 2011


Crystal Han from 360 Investments Reveals How to Get the Most Bang for Your Buck
links and banners, Facebook Ads, and much more to choose from. Determine what fits your budget and remember that repetition is key, meaning repeating your advertising methods at least 5 to 7 times before seeing the fruits of its labor. Our company understands the importance of advertising and therefore continues to spend advertising dollars in magazines like Realty411, email campaigns/eblasts, and mailers. Title representatives are a great source to get farming list/packages with tailored information to target your mailing campaigns such as letters to all out of state owners who may be distressed and motivated to seller their property. Online. With the internet accessible to most people these days, it has become increasing popular to use online marketing strategies. First and foremost, your business should have a website with information about your company, product, services, experience, background, and contact information. Your web pages should include coded key terms for proper search engine optimization (SEO) so that potential customers can find your website based on the words searched. Send out content rich newsletters to keep them up to date with news, events, announcements, and information. Another popular approach is to create a blog that uses key terms in its title entry and have important words in the description following the title. Social media networks such as Twitter, Facebook, LinkedIn, and YouTube are great tools you can use to
Continued on pg. 54

Cash Flow in Jackson
In 2007, A job loss transformed Erica Reynolds into a real estate investor. Now, she’s creating cash flow for others
or most people, a job lay off would be devastating, but for Erica Reynolds losing her job was the motivation she needed to start investing. “I hated that someone else had control of my life and finances. In addition, I wanted to create passive income,” she recalls. Because Reynolds is based in Los Angeles, home of one of the highest-priced markets in the nation, she decided to invest in other states “We live in one of the most expensive markets in the nation, that is why I own rentals long distance.” Reynolds says the ROI is “way better” in other states. “Cash flow is wonderful and properties are affordable.” When asked how she did it, she replies: “I got started by developing a trustworthy team who could be my eyes while I am far away, working with a great property manager and


Ongoing housing projects with big names like Habitat for Humanity, Oprah Winfrey, and Kevin Garnett have made a strong impact in the area. One of the most promising sectors for Jackson is the automobile industry. In fact, Nissan Motor Company employs more than 5,300 workers. Reynolds also likes to invest in areas where there is a commitment to higher learning. “Jackson is home to many top schools and universities, such as Jackson State University, University of Mississippi Medical Center, Millsaps College and Belhaven University. When asked what her personal real estate goals are, she replies with missing a beat: “To help investors understand the importance of obtaining cash flow properties at this time.” If ever there was a time, that time is now, Reynolds explains. “In the words of one of my favorite mentors, Warren Buffet: ‘Buy when the bears are giving them away.’” — by Linda Pliagas To contact Erica Reynolds, please contact her via email at: or phone: 818-478-0737

“What I love about Mississippi is the fact that property taxes are really low”
a man on the ground.” Since then, Reynolds, who describes herself as a buy-and-hold investor, has been managing her investments from afar. For her, it has been a profitable move. “My experience has been great. Property management has been a big key factor,” she explains. Reynolds is now going beyond just buying assets for herself, she now also helps find properties for others. She has developed a loyal following and is garnishing a reputation among real estate groups as a strong proponent of out of state investing. Although Reynolds has invested in many markets, including Dallas and Indianapolis, currently she is excited about Jackson, Miss. “It’s an excellent rental market. This market is very affordable,” she continues. “What I love about Mississippi is that the property taxes are really low. Jackson is known as ‘the city of soul.’ The area has experienced steady growth in the rental market.”

Jackson, Mississippi?
We offer Great ROI on Affordable Rental Homes! Everything in place, Turnkey deals and light fixers.

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Why Jackson?

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“ Financing is available with 50% down”

For information, contact:

         

Erica Reynolds


PAGE 48 • 2011

Distressed Assets
By Lori Greymont


here’s a house on Vine Street in Atlanta. The homeowners defaulted and the bank foreclosed. Then the property was listed at 80% of its value by an agent specializing in REOs. The three-bedroom, one-bath house in a decent working-class neighborhood didn’t sell. So the agent dropped the price. And dropped it again. Why wouldn’t the house sell? It was in good, not great, condition. The house didn’t sell because no one in the neighborhood could get a loan. Finally, the asset manager had to get the distressed property off the books. He slashed the asking price to $10,000 and listed it with other similarly priced houses, and then sent the bargain list to investors. Distressed assets can be huge money makers for savvy investors—as long as they follow the five principles for converting empty properties into cashproducers. 1. Concentrate Efforts. Decide in advance which areas of the country you’d like to invest in. You’ll find the best bargains in the mid-west and southeast. Focus on a few cities and learn as much as you can about them. Other investors are a great help with this investigation. Also read local blogs. What are properties renting for? What is the inventory? 2. Do Due Diligence. Once you have focused on a few areas, start perusing lists of distressed assets. You’ll want the newest house you can find AND with the least liens. Make sure you adjust the offer price on this

to be in line with the neighborhood’s other distressed homes. All distressed properties have liens, usually tax liens, but sometimes water or sewer liens. Factor those into your purchase price. Most on-line real estate sites can’t help much with understanding property condition. There is no substitute for feet on the ground, which leads us to…. 3. Build a Team. Because you’ve concentrated your efforts, it’s a lot easier to find someone willing to drive by a property and peek in the windows. This banking meltdown has allowed the creation of many support businesses for the banks to look at, price and manage their own distressed assets. You can search the internet for “Distressed Asset Management”, “BPO’s”, “DriveBy Services” or a host of other words and pull resources that are your feet and eyes on the ground. Plug into the existing network of professionals and within a day or less you will know if you found a gem or not. And when you work with someone you like, call them back for repeat business. Relationships are also key. 4. Sell Quickly. There are more properties one the market than anyone can buy so how do you sell your property ahead of the neighbor? Finance your buyer. There are many creative financing methods that you can employ that offer you control and a great return. If your buyer can be approved by you, they can make a decision in days and be in the home in less than a week or two. This helps preserve your asset from vanContinued on pg. 59
PAGE 49 • 2011

7 Deadly and Common Mistakes to Avoid When You Carry Paper
wner financing is quickly gaining popularity as a way for sellers to sell property for top dollar without relying on the bank financing that is available (or not) to prospective buyers. Unfortunately, most sellers (and the professionals who serve them) don’t seem to have a basic understanding of the secondary note market, which profoundly affects the paper asset (the note) they are left holding. Sadly, this often equates into unnecessary financial losses when the seller/note holder goes to sell all or part of their note to raise cash. Seller financing helps sellers get top dollar for their property, Dawn makes sure


they get top dollar for their paper, by using her expertise to: •engineer the transaction intelligently •make sure the note documents are accurate and complete •fully underwrite the buyer The following is an excerpt from her book, “Seller Financing on Steroids”. When sellers are going to become the bank on their own property, they need to learn to think like a bank, or hire their own personal underwriter. Deadly Mistake #1: Take a small down payment, or none at all Isn’t it amazing the price you can get for
PAGE 50 • 2011

your property if you don’t ask for a down payment? You can make owning a home cheaper than renting if you want to! It’s OK with me if you take a small down payment to sell quickly for the price you want . . . just don’t be offended when I offer you a small price for your note, or I tell you I can only buy a partial, or that I can’t buy it at all. Why? Because the risk of default is so high. If things got tough, it would be too easy for the buyer to just walk away, because they don’t have enough ‘skin in the game’. And actually, if they can no longer

ford the payments, then it would be wonderful if they would just walk away. But normally, they don’t. They wait for you to foreclose on them. In California that can take anywhere from 5-18 months, in other states it can take 2-3 years . . . ouch. Sure, you’ll get the property back, but after how many missed payments, and how much in legal fees? And will the property be trashed, and/or will the market be even softer when you finally have possession again? Accepting a small down payment all too often translates into financial loss . . . there’s just not enough of a financial buffer if something goes sideways. It’s like sitting on a porcupine and wondering why you’re not feeling so cushy and cozy. Take the largest down payment you can get. Getting a 20% down payment will greatly reduce the statistical likelihood of default (and make your note much more valuable). Remember when that’s what it took to buy a property? A 10% down payment is usually acceptable for an owner occupied single family residence (O/O SFR). A down payment creates Protective Equity. Protective equity protects the seller (note holder) from financial loss if the buyer (note payor) defaults. The larger the down payment, the greater the instant equity a buyer has. Think of a down payment as the layer of cream on a fresh cup of milk. The thicker the layer of cream, the richer and tastier it is. If you get a 20% down payment or more, then you’ll have a note that’s worth holding or selling. It’ll be rich and tasty, and I’ll want to have it for dessert, sweetening up my portfolio of real estate notes. If you’re going to take a small down payment, you’ll want to find a way to reduce or eliminate your exposure to foreclosure (or the risk that a note buyer will have if they buy your note). Perhaps you’ll want to create two notes instead of one, or use the Title Holding Land Trust to avoid foreclosure altogether. There are some very innovative ways to structure transactions to maximize both real and paper assets. Sophisticated investors are using these strategies every day. Deadly Mistake #2: Don’t ask for the buyer’s SS# and don’t run a credit report, (or, if you’ve actually done these things, try to lose the credit application and report so it’s unavailable to give a prospective note buyer).

There have been a few times I’ve been able to offer a really good price for a note, just to have the deal fall apart because the note holders couldn’t come up with information like social security numbers for the Payors. The investors out there that will pay the most for your note (ask you to take the smallest discount) will want you to have a Social Security number on the buyers (note Payors), and they’ll want their FICOs to be 620 or above. There are note buyers out there that will buy your note even if you don’t have the buyer’s SS#, but they’ll probably be offering you less for your note. And even a great note by all other accounts will be hard to sell if the Payors’ credit scores are low. It’s often difficult to sell a note where the FICOs are coming in below 600. Why? Because, statistically speaking, the lower the credit score, the greater the chances that the buyer (note payor) will default. Have the buyer provide their SS# by filling out a credit application and signing it, run credit, and if it doesn’t come back above 620, run from the deal, unless...there are always ways to compensate for the risk of lending (your equity) to a buyer with poor credit, but still, it’s a tough conversation with credit scores in the 500s. If you’re going to do the deal anyway, be sure to take a larger-than-average down payment, and be willing to season your note for a year or more. If you hire me as your personal underwriting department, I will make sure you minimize risk, and have a note I can buy at the soonest possible moment for the highest possible price. And even if you’re not thinking of selling your note, don’t you want a strong investment that doesn’t have you addicted

to Milk of Magnesia? Don’t you want to leave a good asset to your heirs and beneficiaries? Putting your transaction together in a way that will make your paper (note) valuable on the secondary market, will automatically assure you that you’ve placed yourself in the most powerful position possible, no matter what happens down the road. It provides the most flexibility and potential liquidity long term. If the down payment is small, and the buyer’s credit scores are low, then I highly recommend that you consider using the Title Holding (Land) Trust, but only if you don’t plan on cashing out. You can’t sell a beneficial interest in a trust the same way you can sell a note). Deadly Mistake #3: Lose the original note Deadly Mistake #4: Make the interest rate on the note nice and low Deadly Mistake #5: Create a short-term balloon Deadly Mistake #6: Fail to include a provision for late payments and a due on sale clause to your note Deadly Mistake #7: Don’t keep a careful accounting of the note payments you receive A 32-page preview of “Seller Financing on Steroids” is available as a free download at You can also buy the full ebook for $9.97, or order the paperback from Amazon for $14.97. Those interested in learning “The Dance Between Property and Paper” will want to consider joining Owner Financing Club, a virtual real estate investment club focused on owner financing and notes:

When banks say NO, I say YES!
Dawn Rickabaugh, Broker, Owner Financing Consultant

Seller Financing on


PAGE 51 • 2011

(626)470-3477 is a real estate investment firm focused on providing investors alternative methods for purchasing real estate. Our aim is to help our clients utilize retirement assets to act as “cash buyers” in this market. We believe real estate investors make money at the time of purchase, so we work hard to identify the best opportunities for our clients. Ultimately, we believe smart real estate investing can provide greater safety with higher returns than alternatives, and clients with retirement accounts need this important diversification tool. We seek appreciation opportunities with no debt and income properties with a cautious use of debt. We design real estate investment strategies for our clients who utilize either self-directed retirement funds, or personal discretionary funds. We are proud that we are on the forefront of what we believe is a coming boom in retirement investing into real estate projects. We target double digit annualized returns for client portfolios. Additionally, the transparency of real estate investing allows clients to “see, touch, and feel” their investments and know where their money is invested. designs the investments offered to clients into three categories: 1. Wealth Building - Ideal for the majority of our clients who are looking for substantial growth in their portfolio. 2. Wealth/Income - The generation of both income and cash payments during the term; primary focus is on the larger gains at the end of the project term. 3. Income - Provides a steady cash flow stream. Perfect for investors entering the retirement phase. Our clients are the sole director of their capital. Invest Indy performs a thorough due diligence process on each investment. Our clients have all the information

I adds NEW Spin to Passive Real Estate Investing
essary to make an informed decision. Each investment has complete accounting of where the money is allocated and how the money is utilized. We also work directly with the client’s IRA custodian or advisor and assist with all the necessary paperwork to ensure their investment is as trouble-free as possible. Owner Financing Opportunities for Leverage of Your Investment Capital probably already realize that real estate is an excellent place to invest your money. What has been holding you back? In some cases it may be a lack of experience, or time to commit... but for most, it is a lack of capital to start with. Frankly, banks are not at all interested in loaning for investment properties. It is hard enough to get them to loan on a primary residence, let alone an investment property. So how can you leverage your available capital to take advantage of this once in a lifetime real estate opportunity? has the answer......... OWNER FINANCING!! Because we own our properties outright, we have the ability to sell our properties with built-in owner financing. Most of the properties we sell to investors today are from our own portfolio that we have held for years. Not only does that give us a solid track record of documented performance, it allows us to sell off properties that we have already depreciated creating fantastic opportunities for new investors. They get a seasoned cash flow property, we get a solid performing note and mortgage on a property that we are confident in the value of. So how does it work? It is simple really. Find a property on our website that you are interested in and check out the full detail section. Each property has slightly different terms depending upon its value, how
PAGE 52 • 2011

long we have held it, rent value, etc. Typically our terms range from 33% to 50% down payment, 8% to 9% interest, 30-year amortization with a 10 year balloon payment. Again, each property and situation is different, so please check with us regarding available terms for that property. (Note: We are not a bank or public lender and will only owner finance our own properties.)

Retirement Accelerator Program If you really want to accelerate your investing, check out our Retirement Accelerator Program. The Accelerator Program is a simple concept that addresses many of our client’s primary objectives: “I want free & clear real estate as soon as possible.” By leveraging our properties with owner financing and then applying all the positive cash flow against the outstanding notes.... the properties will essentially pay for themselves and will typically be free and clear within ten years. Much faster in some cases. You can view a short presentation on The Retirement Accelerator Program at: Learn More About Our Companies Dorfman Property Management: For over 35 years, Dorfman Property Management has been Indianapolis’s premier property management company. Having worked with thousands of properties and property owners over the years, we fully understand the subtle nuances of the Indy market, and work diligently to get your properties leased FAST and with quality tenants. Contact us at 317-507-4323. Invest Indy specializes in creating turnkey investing opportunities for local and national investors looking to take a more passive role in the process. Our experience allows our clients to leverage our knowledge in property acquisition, rehabilitation, tenanting, and property management. Contact us at 317-507-4323.

“The Most Revolutionary Approach To Turnkey Real Estate Investing... Cashflow Properties With Owner Financing”
Real Estate Investors Finally Catch a Break! Long Time Real Estate Investors Are Looking To Refresh Their Current Portfolio… Offering Up Unprecedented Opportunities For Other Investors Looking For Cashflow Property.
Discover how our Investor Program can help you... Passively Invest in One of the Best Real Estate Markets for Cashflow of Our Lifetimes
Partner with Local Indianapolis Investor and Property Management Specialists who have over 35 Years Experience in the market. Purchase “Seasoned Properties” with Solid Rental Histories & Maintenance Programs Avoid the Hassles of Bank Financing Use Your Self-Directed IRA to Fund the Down Payment with our Non-Recourse Owner Financing.
Invest Indy specializes in creating turnkey investing opportunities for Local and National Investors who are looking to take a more passive role in the process. Our extensive experience allows our ASK ABOUT OUR clients to leverage our knowledge in $2000 property acquisition, rehabilitation, tenanting, and property management. FINDERS FEE & Dorfman Property Management Have Combined Forces to Deliver…

943 W. 34th St, Indy 3 bed / 1 bath / 866 sq ft Built 1900 Currently Rented $650/mo. Same Tenant since 2009

Property Historical Cashflow Details (7yr Avg.): In Portfolio Since 2003 Annual Gross Income: $7,675 Annual Taxes: $825 Annual Insurance: $500 Annual Vacancy / Maintenance: $1078 Annual Management Fee: $748 Average Annual Net Income: $4,524

Investor Purchase Price: Required Down Payment (30%): Projected Closing Costs Cash Required:

$40,000 $12,000 $800 $12,800

Dorfman Property Management


For over 35 years, Dorfman Property Management has been Indianapolis's Premier Property Management Company. Having worked with thousands of properties and property owners over the years, we fully understand the subtle nuances of the Indy market, and work diligently to get your properties leased FAST and with Quality Tenants. Contact us today at 317-507-4323

Owner Financing: $28,000 Terms: 30yr Fixed @ 8% (10yr balloon) Monthly P&I Payment: $205 Annual P&I Payment $2460 Projected Adjusted Net Income: $2,064 Projected Cash on Cash Return: 16.08%* *Projected Cash on Cash Return

$12,800 Gets You A Free & Clear $40,000 Rental Property in 8.58 years Under Retirement Accelerator Program… Generating approx. $4,500 Net Income For Life


(for more available properties)

(Additional Properties Also Available)

(317) 507-4323

How to Protect
ne of the most detrimental mistakes an investor can make is not having adequate legal protection. Mathew Mullhofer, an

More Marketing, pg. 46


Your Net Worth

nies, and domestic corporations. Additionally, he has formed numerous offshore corporations, offshore trust, and private offshore bank ac-

Mathew Mullhofer, an investor and California attorney, says it’s important to be pro-active to maximize your legal protection.
investor and attorney located in Orange County, Calif., says it’s important for investors to be pro-active for maximum protection. Asset protection is very much like health insurance, one needs to have it in place before disaster strikes. “You can’t set a trust or LLC if you already have a judgment against you,” he warns. “State and federal law prohibits any individual from transferring their assets after a lawsuit has been filed against them. The prudent business person must plan prior to any potential lawsuit in order to legally protect the assets that they have worked so very hard to acquire.” Another common mistake that investors make, according to Mr. Mullhofer is that “they enter into business deals without written documents, which gives entrepreneurs no legal protection or recourse should their partners not agree or keep their word.” Mr. Mullhofer has been practicing law in California for 13 years. He has extensive experience in the area of estate planning and asset protection, which includes the formation of trust, wills, family limited partnerships, limited liability

counts. Mr. Mullhofer is also experienced in representing taxpayers in collection efforts by the Internal Revenue Service, Franchise Tax Board, and State Board of Equalization. When asked about the different types of legal protection that can be set up, Mr. Mullhofer says that the Family Limited Partnership has been around for many years in California, however, most individuals may recognize the Limited Liability Company (LLC) more often. The LLC was only recently enacted by Governor Pete Wilson, however the LLC continues to be a valuable asset protection tool. A Land Trust is also used in conjunction with an LLC and an LP for added protection. Ideally, according to Mr. Mullhofer, each property should be in a separate legal entity for maximum protection. An investor’s protection plan will depend on the number of properties they have and other individual needs. For more information on how investors can maximize their legal protection and tax and estate planning, please contact Mr. Mullhofer’s law office today at: (877) 246-2770

market and advertise your business. I highly suggest that you customize your Twitter page with your brand, create a Facebook Fan Page for your business, develop your own LinkedIn Group, and also customize your own YouTube Channel. After setting up these social media pages, it’s important to remain active on these accounts by posting, uploading, inviting, connecting, commenting, messaging, announcing, liking, or whatever is necessary to keep your marketing efforts ongoing using these channels. Best of all, these social media marketing techniques are FREE but time consuming. If you do not have time to do it yourself, I suggest you hire a person to do it for you and keep it going. Some advance techniques include developing mobile applications your customers can download to their mobile devices. For instance, we are creating a deal analyzer so that our users can quickly analyze a deal to figure out cash flow and return on investment. Public Relations. Your business communication and image to the public can be delivered through a publicist and/or written through a well composed press release and/or press kit. This press release can be published and picked up by major journalists who will write about your company and even contact you for a formal interview. To be written up in articles is a great way to maximize your marketing efforts. Another way is to write your own articles to be submitted in feature print

like magazines, newspapers, and blogs. Become a specialist in your industry so writers will reach out to you for your opinions and comments which will become published editorials. Make sure to keep all of your featured press materials framed in your office, displayed on your website, and added to your press kit. Networking. Networking is a form of marketing. Attend events and meetings, join groups and organizations, become affiliates to refer customers to other businesses, get more training and education and network with fellow students, mentors, trainers, and coaches, create relationships, offer reward programs for referrals and market everywhere you go. Make sure to give your business cards out. More importantly, be sure to collect others’ contact information and confirm their phone number and email address so you can follow up with them. Follow up is the key to developing the relationship. I have given out thousands of business cards and rarely do I receive a follow up call or email so set yourself apart by doing what others care not to do. I hope that you will find some of these marketing strategies useful in your real estate business. Make sure to track your marketing efforts to know which strategies are producing the best results. And remember: More Marketing = More Money! To learn from Crystal Han, be sure to visit her website at:
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PAGE 54 • 2011

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Invest in YOU
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was learning from a book & DVD, and I had another kickboxer in the ring with a trainer, who do you think is going to be the dominant fighter? And that’s where we say: You know what, if you really want to be an investor, then you need to be trained Sensei style.” At Black Belt Investors, you will learn Sensei’s wholesale system of “Find It, Bind It and Assign It™.” In the Find It stage you will learn how to guerilla market to find cash buyers, distressed sellers and properties and draft a “power team” that will help you move to the next level. Once you have a motivated seller you will then move to the next stage of Bind It, and here you will learn how to research making offer the sellers can’t refuse, negotiations and how to use Sensei’s simple 1-page contract. Now that the property is secured by a contract, you will move to the third stage of Assign It. Here you’ll learn how to inexpensively market the properties so you can flip it within hours and get paid! Sitting on your hands and hoping that you will become a successful investor is not a course of action. Get off your hands and take action now! You owe it to yourself to become successful. I suggest to get the training from an experienced investor that can get you in the right mindset, armed with the weapons to take down houses and build your real estate cash machine. “Onsite mentoring” is a core reason for the success of Sensei’s students. “I can teach

you at my Wholesale Training Camp,” said Sensei, “but you would be more effective if you took that training camp to build a solid foundation, and then deploy out in the field along side of me to put some heat in the streets. Being action oriented, armed with the effective tactics, knocking down obstacles, and giving it your all will open the doors of opportunity. And don’t worry... if you’re too tired to go through the door, then Sensei will push you through. For more information, please visit:

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The Pasadena Cashflow Masters Group welcomes all levels of investors. We play Robert Kiyosaki’s Cashflow boardgame each month to learn the skills required for acquiring wealth. I personally look forward to connecting with you at one of our upcoming events.
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AZ Property Tour, pg. 28

buildings.” Barker adds, “We have a couple of personal teams who handle every aspect of the investment busiMike Barker ness.” His team includes bird dogs, rehabbers, property managers, brokers and everything in between. AMERICANS: FLIP TO AUSTRALIAN INVESTORS! One unique program that REO Bailout offers that no other company can match is the is the “Flip to Australians” exit strategy. This means that in addition to securing a deeply discounted property, rehab team, and property manager, REO Bailout will also will procure an Australian investor to buy the inventory purchased by their clients. Barker explains: “This particular program has worked extremely well this year, so far we have completed over 200 sales to our Australian friends. In a nut shell we buy the property, rehab, put in qualified renters and sell the completed product to our friends abroad. We have some of our hardest workers on the ground in Australia and they have done a fabulous job selling a piece of the American Dream to our counterparts. This is a win win for all involved.” REO Bailout’s “Flip to Australians” program has proven to be extremely popular, according to Barker. “We are on board to begin selling 50 or more properties a month to Australian investors,” he explains, adding “And they have just put a team on the ground in Singapore.” Undoubtedly, in today’s market, cash is king, but for those who may fall a bit short, REO Bailout has financing options available with their preferred banking, private and hard money lenders. They, in turn, can provide investors with 70% to 80% leverage opportunities. While Barker is not quitting his day job anytime soon (law enforcement is his personal passion), his annual salary is similar to his monthly rental cash flow. “This market right now is a no brainer,” he confides. “I just purchased 47 condos, all fully rented with no rehab needed. I am also looking at an additional 40, just these two acquisitions alone will gross $55,000 a month. Not too shabby for a full-time SWAT officer!”

CA$HFLOW Board Games
Track.” Only by acquiring and investing in assets do you slowly When I think back to my decidiscover what it takes to generate sion to become a serious real the passive income necessary to estate investor, I almost always make it into the “Fast Track.” return to the day that I first had At the heart of the game is makthe opportunity to read Robert ing players learn how to actively Kiyosaki’s book “Rich Dad, manage their money by filling Poor Dad.” If you have not out and creating their own finanDoug Carver read this book, I would highly cial statement. Players choose recommend you read it and read it again. from a variety of starting careers (Truck It literally opened my eyes and explained Driver, Mechanic, Lawyer, Airline Pilot, how money works — giving me the true etc.) and fill out their financial statements facts about money that the rich teach their appropriately. As they earn money, pay children and that the middle-class do not. bills and invest in different deals they duWhile the book opened my eyes to ev- tifully log each change to their financial erything I was doing wrong with my statements and begin to understand and finances, it wasn’t until 5 years control how money flows through later when I started playing their lives. Robert Kiyosaki’s Cashflow Literally thousands of 101 board game that I acCashflow game clubs exist tually began to take action around the world. These are and implement the ideas groups of “like-minded” inand apply the concepts laid dividuals who have typically out in the “Rich Dad, Poor read Mr. Kiyosaki’s book and Dad” book. I like to say that get together regularly to play the “Rich Dad” book puts the his board games to develop their knowledge to create financial freeskills for investing and money mandom in your head, but playing the Cashflow agement. Besides creating a fun environgame actually puts the knowledge to create ment to learn life changing financial skills, financial freedom in your heart. these clubs offer opportunities to create You may ask “What is Cashflow 101 lasting friendships, learn about various board game?” Well, the best way to de- investment opportunities, and build a netscribe it is Monopoly on steroids. Like work of contacts who can support you in Monopoly it is a board game that involves securing your financial future. investing, but unlike Monopoly it serves It was because of the amazing people as a powerful tool for learning basic finan- that I met at those first Cashflow game club cial strategies and accounting principles. events that I decided to start my own clubs Simply stated, Cashflow 101 is the first in in Burbank and Pasadena, Calif., over five a series of games created by Mr. Kiyosaki years ago. So go ahead and check out a to reinforce the information and financial local Cashflow club in your area. You can principles that he teaches in his books. go to where many of the In the board game, you play a rat that clubs (including mine) are listed and you travels around two unique tracks. At the be- can join free. If you are like me, the board ginning of the game you start in the small game will transform your “money mindinner circle track called the “Rat Race.” set,” whether you are a newcomer looking You goal is to escape the “Rat Race” and to get out of the “Rate Race,” or seasoned make it to the larger outer track called the investor seeking a faster path to financial “Fast Track.” Starting in the “Rat Race,” freedom. you quickly discover that simply earning a “salary” will not allow you to create fi- To contact Doug Carver, please email him nancial freedom and escape to the “Fast directly at:
PAGE 57 • 2011

Robert Kiyosaki’s

by Douglas Carver

Real Recovery Starts with Investor Lending Changes
by Tom Wilson


his is the best window of opportunity of our lifetime to procure real estate for long-term hold. Unfortunately, the pendulum at capital hill and Wall Street overreacted to the short-term speculative investors at the height of the bubble and has Tom Wilson swung too far back to conservative terms for investor loans, thus impeding the ability of investors to get buying to homes off the market and occupied. renting.We This is not just a problem for investors have an who want to further build their retirement escalating portfolios and reduce their personal depen- p r o b l e m dence on the country’s overburdened social of unsold programs. It is also a serious detriment to homes sitthis country’s economic need to acceler- ting on the ate the process of rectifying our debt crisis market. If from underwater real estate. owner ocCurrently 25% of the nation’s and 35% c u p a n t s of California’s home loans are upside down cannot abFrom left to right: Sean O’Toole, Tom Wilson, Dr. Doug Duncan, Bruce Norris, in spite of over three years of a high rate of sorb two- Howard Blum at Fannie Mae meeting in Washington DC May 25, 2011 foreclosure sales. And yet the rate of fore- thirds of closure sales is less that a quarter of the rate the housthat they should be relative to the rate of ing inventory, who will? Clearly the only occupants alike delinquencies. This has resulted in a “shad- ones who can do that are investors. Not only •Accept more reasonable cash reserves reow housing inventory” of 42 months at the do they absorb foreclosure inventory and quirements current absorption rates. So far. As a nation provide housing, but by using their capital What do lenders have to lose by these it appears that if something doesn’t change for improvements they also remove blight changes? Very little. The long term invesit will take 4-7 years to get to a more normal from neighborhoods, thereby improving tor delinquency rate is no higher than that property values of owner occupants and it is actually lower and local tax rev- for FHA loans. Current and traditional inenue. If more in- vestors are not speculators; they add value vestor financing and experience to the process of turning is made available, empty homes into family homes. Finally, the absorption rate many of the changes that investors seek are will accelerate and roll-backs to the policies in place before with it the end of loosening of lending policies fueled purour real estate cri- chases by under-qualified buyers. Investors sis becomes more don’t just want, they know these changes tangible. Histori- are essential to the recovery of the real escally, the real es- tate market in the U.S. tate economy has To promote these ideas with the policy always played a makers at Fannie Mae and HUD, I releading roll in our cently joined Howard Blum, President of national recovery The Financial News and Information SerSource: Corelogic, from recessions. vice, Bruce Norris, President of The Norris What do inves- Group, and Sean O’Toole, CEO of

and sustainable home sales environment and continuum. And as if this situation were not enough, to further amplify the problem, only 33% of sellers and those losing their homes are willing or able to repurchase. That’s right, 67% of former homeowners have moved from

tors need to move forward? I believe the following three-year changes in loan policies: •Increase the amount of available loans to qualified investors to an unlimited number for three years (as it was in the past) •Make the 203K loan program more available to investors (loans that include funds for improvements) •Allow “simple assumptions” of any Fannie, Freddie, or FHA loans •Allow equal access to all governmentowned inventory for investor and owner-

PAGE 58 • 2011

closure Radar, in Washington D.C. to discuss the potential of easing the requirements for investor loans. Our audience of 15 including, 6 vice presidents, demonstrated that Fannie Mae and HUD are serious about wanting to improve the situation and are willing to consider new ideas. Source: LPS,, and The Norris Group. They felt that since multiple rental properties can be justified and sup- Tom Wilson has executed over $100M ported by income rather than just borrower and 1,600 units of real estate investment financials, a hybrid product could be con- deals over 35 years. He first invested as sidered that is a bridge between traditional a part-time activity, and then after thirty residential and multifamily loans. The main years managing some of Silicon Valley’s hurdle yet to overcome is framing a policy pioneering technology companies, Mr. that would be politically acceptable to both Wilson put his business and management congress and the public. experience toward full-time real estate For more information, please contact investing. Wilson Investment Properties Tom Wilson at 408-867-1867 or offers high quality, high-cash flow, risk and leased investment properties.

Distressed Assets, pg. 49

dalism, decay and overhead costs that you have to pay if it sits vacant. 5. Get in the Game. There is nothing more expensive than cost of lost opportunity. We all know that inflation is here to stay for the next few years. If our gas and groceries cost more today, won’t our housing cost more in a few years? The best time to buy properties has never been when the market is going up — it’s actually right now. Where else, outside of a game of Monopoly, have you been able to purchase multiple properties for as little as $25,000? Lori Greymont is CEO of Summit Assets Group. She offers educational presentations around the U.S., trains and mentors people new to purchasing distressed assets and coaches on creative financing techniques. Her company sells single fix and flip properties, bulk lists, and tenanted cash-flowing properties.
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cent guideline changes, no longer will an owner have to wait six months to get their money back when they purchase a property with their own funds. “Fannie Mae is realizing that investors can absorb the excess inventory,” Bighaus Thanks to the recent guideline changes, no longer will says. Gosser few an owner have to wait six months to get their money back years ago.and Bighuas joined forces aeach They say they compliment when they purchased a property with their own funds. other because of their diverse backgrounds. Gosser, who had more experience with first time home buyers, blended well with Biglow interest rates in the lower to mid five subject property. huas and his expertise with investors. percent range. Because it’s a buyer’s mar“Our services are very well rounded, “ The team is also excited about changing ket, investor activity is soaring, and Team legislature favoring investors. For example, Bighuas states. “We cover virtually every Gosser Bighuas has never been busier. The Fannie Mae recently released new guide- aspect of lending. Team is able to fund transactions in ten lines on cash out refinances for investment states. Currently, the largest level of activ- properties. Gosser says these new rules will — by Linda Pliagas ity for them is the Southeastern and West open the doors for a significant number of Coast markets. investors to re-coup their money when they For more information about financing an Bighaus says that working with Gosser purchase a property and for those who own owner-occupied or investment property, call Bighuas at Guild Mortgage has many ad- five or more properties. Thanks to the re- Team Gosser Bighuas call 425.412.5239

financial fallacy is permeating the industry, according to Jason Gosser and Steve Bighaus, partners of Team Gosser Bighuas at Guild Mortgage. “From my perspective, the current lending situation is fantastic,” Gosser says. “There is a myth that lending is difficult, but that is not the case,” he says, adding, “Lending is not difficult if you can verify assets and income.” Investors are being rewarded for their strong credit and financial standing with


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PAGE 13 • 2011

Dave Lindahl, pg. 22

the right kinds of properties for cash flow. What Walter created was a job that required him to get up every morning and “go to work”. After months of effort and stress — finding a bargain home, closing on it, fixing it up, and reselling it — he was rejuvenated by the thrill of making a big profit. But to earn his next “paycheck”, he’d have to start all over again. It wasn’t because he

knocks alone. The systematic approach to investing in apartment buildings appealed to me and I know it has some appeal to you as well. So, what is the system for investing in apartment buildings? It is much the same as for any real estate venture and it starts with recognizing the value in the commodity. If you don’t understand why real estate

•Property improvement •Property management •Asset protection and wealth development None of these things are any less important than the others and they are listed in a basic sequence of how and when you should pursue them. I can’t possibly discuss them all in detail within a single article but I do want you to see that there is a logical progression here. Each step in the system has its own steps to learn, ways to validate learning, and also specific action steps to take. Back to how my system had me do things differently than Walter. Almost everybody avoids…no, almost everybody is afraid of apartments. They are afraid of Property Management (a step in the system above). I was too at first, and that is why I turned common Property Management beliefs on their head. I knew I could use this general fear to my advantage. With the help of mentors in my life I was able to create the best apartment buying system that alleviated the need for me to be a landlord and didn’t have all the tax drawbacks of Walter’s system. It provided perpetual income for me and had my tenants pay my mortgage. Receive Dave Lindahl’s free report, call 800-559-8590 or visit: To read more about Dave and hear a students success story visit:

wanted to. It’s because he had to. And it always took 4 to 6 months to complete the cycle and make another profit. I decided I needed to follow a different system by investing and holding apartment buildings. Naturally, I am a believer in systems as it was a system that helped me escape a dead end career as a landscaper to do what I am doing today. For me, a system represented a step-by-step approach to doing something I hadn’t done before. I had no road map and didn’t want to learn from the school of hard

is valuable, you can’t possibly differentiate a good deal from a bad one. The system for real estate also involves the steps outlined: •Building a team •Finding properties •Locating funding sources •Making offers •Securing funding •Negotiating deals •Streamlining the closing process

Naturally, I am a believer in systems as it was a system that helped me escape a dead end career as a landscaper to do what I am doing today.

PAGE 62 • 2011

The Best Opportunities
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B u yMe mp h i s F or e cl o s ur e s. c o m i s yo ur i d e a l s o u rc e f o r p ort f o l io - b u i l di n g a n d c a s h- f l o w i ng pr o p ert i es i n Memp h i s , T e n n es se e a n d ot h er c it i es . W e p r ov id e h o u se s i n pr ef e rr e d are a s at l o w p ri c e p o in t s w it h e xc e l l e nt ca s h f l o w. O u r pr o p er t i e s ar e a lr e ad y r e nt e d a nd w e p r ov i d e ex c ep t i o na l i n h o u s e ma n a g e me nt . B u i l d yo ur po rt f o l i o th e ri g h t w a y , f r o m a n yw h e r e , w it h a n ex p er i e n c e d a n d r el i a b l e t ea m. W e sp e c ia l i ze in c re at iv e f i n a nc i n g o f f e ri n g p r ef er re d i n st it ut i on a l, p riv at e a n d ow n e r f i n an c i ng .

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